June 13, 2024
Top 10 Stock CTT - Correios 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: CTT - Correios – Top 10 Stock in PSI-20 Index
CTT - Correios is listed as a top 10 stock on June 13, 2024 in the market index PSI 20 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 4 (4% performer), Obermatt issues an overall sell recommendation for CTT - Correios on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Air Freight & Logistics |
| Index | Renewables Users, Sound Pay Europe, PSI General, PSI 20 |
| Size class | 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 CTT - Correios Sell
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 32 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 32 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock CTT - Correios are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for CTT - Correios. The consolidated Value Rank has a low rank of 27 which means that the share price of CTT - Correios 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 73% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 32, 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 32% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 22, which means that the company has a riskier financing structure than 78% 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 32, which means that professional investors are more pessimistic about the stock than for 68% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, CTT - Correios is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that CTT - Correios 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 32. The negative market view on CTT - Correios 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 CTT - Correios 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 CTT - Correios only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 32 (better than 32% compared with alternatives), overall professional sentiment and engagement for the stock CTT - Correios is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for CTT - Correios. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in CTT - Correios. But the Professional Investors rank is low at 33, which means that professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 46, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 54% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 32 (less encouraging than 68% compared with investment alternatives), CTT - Correios has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: CTT - Correios Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), CTT - Correios shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for CTT - Correios. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 53% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 46 which means that the stock price compared with what market professionals expect for future profits is higher than 54% of comparable companies, indicating a low value concerning CTT - Correios's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 14 which means that the stock price compared with what market professionals expect for future profit levels is higher than 86% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 27 is also low. Compared with invested capital, the stock price is higher than for 73% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on CTT - Correios's stock price compared with the company's operational size and dividend yields. Should dividend investors pick CTT - Correios? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose CTT - Correios only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: CTT - Correios Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 32 (better than 32% compared with alternatives), CTT - Correios 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 CTT - Correios. Sales Growth has a rank of 50 which means that currently professionals expect the company to grow more than 50% of its competitors. Stock Returns are also above average with a rank of 70. But Capital Growth has only a rank of 43, which means that currently professionals expect the company to grow its invested capital less than 57% of its competitors. Profit Growth is also low, with a rank of only 6, 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 32, 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 70% 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: CTT - Correios Debt Financing Safety risky
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 5 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company CTT - Correios has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of CTT - Correios 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 CTT - Correios. Liquidity is at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 5, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 95% of its competitors. Leverage is also high at a rank of 6, which means that the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), CTT - Correios has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: CTT - Correios Lowest Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 32 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 6 |
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ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), CTT - Correios (Air Freight & Logistics, Portugal) shares have lower financial characteristics compared with similar stocks. Shares of CTT - Correios are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives), show below-average growth (Growth Rank of 32), and are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on CTT - Correios's financial characteristics. As the company CTT - Correios's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 27), low growth (Obermatt Growth Rank of 32), and risky financing practices (Obermatt Safety Rank of 22), 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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