April 18, 2024
Top 10 Stock Cresud Sell 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: Cresud – Top 10 Stock in Mercado de Valores de Buenos Aires Index MERVAL
Cresud is listed as a top 10 stock on April 18, 2024 in the market index MERVAL because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 6 (6% performer), Obermatt issues an overall sell recommendation for Cresud on April 18, 2024.
Snapshot: Obermatt Ranks
| Country | Argentina |
| Industry | Agricultural Products |
| Index | MERVAL, R/E Growth Markets, NASDAQ |
| Size class | Medium |
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 Cresud Sell
| 360 METRICS | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| SENTIMENT | ||||||||
| SENTIMENT | 25 |
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| 360° VIEW | ||||||||
| 360° VIEW | 6 |
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ANALYSIS: With an Obermatt 360° View of 6 (better than 6% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cresud are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for Cresud. The consolidated Value Rank has a low rank of 47 which means that the share price of Cresud is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 53% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 13, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is lower than for 13% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 25, which means that the company has a riskier financing structure than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 25, which means that professional investors are more pessimistic about the stock than for 75% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 6, Cresud is worse than 94% of all alternative stock investment opportunities based on the Obermatt Method. This means that Cresud shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 25. The negative market view on Cresud may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While Cresud may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for Cresud only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock Cresud is below industry average.
RECOMMENDATION: With a consolidated Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), Cresud has a reputation among professional investors that is below that of its competitors.
Value Strategy: Cresud Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), Cresud shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cresud. Price-to-Profit (also referred to as price-earnings, P/E) is 81 which means that the stock price compared with what market professionals expect for future profits is lower than for 81% of comparable companies, indicating a good value concerning Cresud's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 62, which means that the stock price is lower as regards to invested capital than for 62% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 68% of alternatives (only 32% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on Cresud's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Cresud Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Cresud shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Cresud. Sales Growth has a below market rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors. The same is valid for Capital Growth, with a rank of 1, and Profit Growth, with a rank of 16. Currently, professionals expect the company to grow its profits less than 84% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 100, which means that the stock returns have recently been above 100% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Cresud, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Cresud Debt Financing Safety below-average
| SAFETY METRICS | April 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 25 |
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ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company Cresud has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Cresud is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Cresud and the other two below average. Refinancing is at 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 15, meaning the company generates less profit to service its debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), Cresud has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Cresud are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Cresud Lowest Financial Performance
| COMBINED PERFORMANCE | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 47 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Cresud (Agricultural Products, Argentina) shares have lower financial characteristics compared with similar stocks. Shares of Cresud are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), show below-average growth (Growth Rank of 13), and are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Cresud's financial characteristics. As the company Cresud's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 47), low growth (Obermatt Growth Rank of 13), and risky financing practices (Obermatt Safety Rank of 25), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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