June 22, 2023
Top 10 Stock CRH 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: CRH – Top 10 Stock in FTSE 100 Index
CRH is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for CRH on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Ireland |
| Industry | Construction Materials |
| Index | EURO STOXX 50, FTSE All Shares, FTSE 100, FTSE 350, ISEQ, Low Emissions, Human Rights, SDG 11, SDG 12, SDG 13, SDG 9, Water Tech |
| Size class | XX-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 CRH Buy
| 360 METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 49 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 48 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 96 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 54 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock CRH are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for CRH. The consolidated Sentiment Rank has a good rank of 96, which means that professional investors are more optimistic about the stock than for 96% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 20, which means that the share price of CRH is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 49, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 49% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 48 which means that the company has a riskier financing structure than 52% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 54, CRH is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 96) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of CRḤ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for CRH very positive
ANALYSIS: With an Obermatt Sentiment Rank of 96 (better than 96% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock CRH is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for CRH. Analyst Opinions are at a rank of 89 (better than 89% 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 86, which means that currently, professional investors hold more stock in this company than in 86% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 93 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 93% of competitors). But Analyst Opinions Change has a below-average rank of 48, 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 CRH. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 96 (more positive than 96% compared with investment alternatives), CRH has a reputation among professional investors that is significantly higher than 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: CRH Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), CRH shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for CRH. Price-to-Sales is 21 which means that the stock price compared with what market professionals expect for future profits is higher than 79% of comparable companies, indicating a low value concerning CRH's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 29, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of CRH. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 20 and Dividend Yield, which is lower than 52% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a SELL recommendation based on CRH's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for CRH? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as CRH? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. CRH may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: CRH Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), CRH 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 all but one indicator above average for CRH. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Capital Growth is also above 22% of competitors with a rank of 67, and Stock Returns with the rank of 77 is also an outperformance. Only Profit Growth is low with a rank of 22 which means that currently, professionals expect the company to grow its profits less than 78% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a HOLD recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, CRH is a good growth stock. ...read more
Safety Strategy: CRH Debt Financing Safety below-average
| SAFETY METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 48 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 41 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company CRH 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 CRH 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 all three metrics below average for CRH. Liquidity is at 41, meaning that the company generates less profit to service its debt than 59% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Finally, Refinancing is at a rank of 41 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 59% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 48 (worse than 52% compared with alternatives), CRH has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: CRH Below-Average Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 49 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 41 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 28 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), CRH (Construction Materials, Ireland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of CRH are low in value (priced high) with a consolidated Obermatt Value Rank of 20 (worse than 80% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 48), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 28, is a hold recommendation based on CRH's financial characteristics. As the company CRH's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 20), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 48), 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.