December 5, 2024
Top 10 Stock Commercial Metals Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Commercial Metals – Top 10 Stock in Customer Satisfaction Leaders in the United States
Commercial Metals is listed as a top 10 stock on December 05, 2024 in the market index Customer Focus US because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for Commercial Metals on December 05, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Steel |
| Index | Customer Focus US, Energy Efficient, Diversity USA, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Commercial Metals Strong Buy
| 360 METRICS | December 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 70 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 86 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Commercial Metals are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Commercial Metals. The consolidated Value Rank has an attractive rank of 70, which means that the share price of Commercial Metals is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 70% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 86. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 69. But the consolidated Growth Rank has a low rank of 33, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 67 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, Commercial Metals is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 70), secure financing practices (Safety Rank of 86), and positive market sentiment in the professional investor community (Sentiment Rank of 69). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 33), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Commercial Metals is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Commercial Metals positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Commercial Metals is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Commercial Metals. Analyst Opinions are at a rank of 55 (better than 55% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 59, which means that currently, professional investors hold more stock in this company than in 59% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 62 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 62% of competitors). But Analyst Opinions Change has a below-average rank of 41, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Commercial Metals. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Commercial Metals has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Commercial Metals Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 70 (better than 70% compared with alternatives), Commercial Metals shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Commercial Metals. Price-to-Sales is 76 which means that the stock price compared with what market professionals expect for future sales is lower than for 76% of comparable companies, indicating a good value for Commercial Metals's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 52% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 58. Compared with other companies in the same industry, dividend yields of Commercial Metals are expected to be higher than for 57% of all competitors (a Dividend Yield rank of 57). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 70, is a buy recommendation based on Commercial Metals's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Commercial Metals based on its detailed value metrics.
Growth Strategy: Commercial Metals Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Commercial Metals shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Commercial Metals. Sales Growth has a rank of 57 which means that currently professionals expect the company to grow more than 57% of its competitors. Stock Returns are also above average with a rank of 59. But Capital Growth has only a rank of 17, which means that currently professionals expect the company to grow its invested capital less than 83% of its competitors. Profit Growth is also low, with a rank of only 31, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 59% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Commercial Metals Debt Financing Safety very solid
| SAFETY METRICS | December 5, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 79 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 73 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
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ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2024, the company Commercial Metals has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Commercial Metals is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Commercial Metals. Leverage is at 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors. Refinancing is at a rank of 79, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. Finally, Liquidity is also good at a rank of 73, which means that the company generates more profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), Commercial Metals has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Commercial Metals Top Financial Performance
| COMBINED PERFORMANCE | December 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 70 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| COMBINED | ||||||||
| COMBINED | 84 |
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ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Commercial Metals (Steel, USA) shares have much better financial characteristics than comparable stocks. Shares of Commercial Metals are a good value (attractively priced) with a consolidated Value Rank of 70 (better than 70% of alternatives), are safely financed (Safety Rank of 86, which means low debt burdens), but show below-average growth (Growth Rank of 33). ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Commercial Metals's financial characteristics. As the company Commercial Metals's key financial metrics exhibit good value (Obermatt Value Rank of 70) but low growth (Obermatt Growth Rank of 33) while being safely financed (Obermatt Safety Rank of 86), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 70% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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