November 21, 2024
Top 10 Stock Downer EDI 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: Downer EDI – Top 10 Stock in Water Technology
Downer EDI is listed as a top 10 stock on November 21, 2024 in the market index Water Tech 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 91 (top 91% performer), Obermatt assesses an overall strong buy recommendation for Downer EDI on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | Australia |
| Industry | Diversified Support Services |
| Index | ASX 100, ASX 200, ASX 300, Water Tech |
| 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 Downer EDI Strong Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 91 |
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ANALYSIS: With an Obermatt 360° View of 91 (better than 91% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Downer EDI are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Downer EDI. The consolidated Value Rank has an attractive rank of 87, which means that the share price of Downer EDI is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 87% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 95, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 55. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 38. Professional investors are more confident in 62% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 91, Downer EDI is better positioned than 91% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 87), above-average growth (Growth Rank of 95), and safe financing practices (Safety Rank of 55), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 38), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Downer EDI is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Downer EDI only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Downer EDI is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Downer EDI. Analyst Opinions are at a rank of 19 (worse than 81% 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 are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Downer EDI. More encouragingly, the Professional Investors rank is 59, which means that professional investors hold more stock in this company than in 59% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 49, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 51% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Downer EDI has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Downer EDI. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Downer EDI Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Downer EDI shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Downer EDI. Price-to-Sales is 97 which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value for Downer EDI's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 65% 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 59. Compared with other companies in the same industry, dividend yields of Downer EDI are expected to be higher than for 77% of all competitors (a Dividend Yield rank of 77). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Downer EDI'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 Downer EDI based on its detailed value metrics.
Growth Strategy: Downer EDI Growth Momentum high
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 20 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 82 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 94 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 91 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 95 |
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ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Downer EDI shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Downer EDI. Profit Growth has a rank of 82 which means that currently professionals expect the company to grow its profits more than 82% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 94, and Stock Returns has a rank of 91 which means that the stock returns have recently been above 91% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 20 (80% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Downer EDI Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 29 |
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| REFINANCING | ||||||||
| REFINANCING | 52 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 55 |
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ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Downer EDI has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Downer EDI 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, with just one indicator above average for Downer EDI and the other two below average. Refinancing is at 52, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. But Leverage is high with a rank of 29, meaning the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. Liquidity is also on the riskier side with a rank of 46, meaning the company generates less profit to service its debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Downer EDI has a financing structure that is safer 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 Downer EDI 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: Downer EDI Top Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| COMBINED | ||||||||
| COMBINED | 100 |
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ANALYSIS: With an Obermatt Combined Rank of 100 (better than 100% compared with investment alternatives), Downer EDI (Diversified Support Services, Australia) shares have much better financial characteristics than comparable stocks. Shares of Downer EDI are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives), show above-average growth (Growth Rank of 95), and are safely financed (Safety Rank of 55), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 100, is a strong buy recommendation based on Downer EDI's financial characteristics. As the company Downer EDI's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 87), above-average growth (Obermatt Growth Rank of 95), and indicate that the company is safely financed (Obermatt Safety Rank of 55), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Downer EDI. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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