May 11, 2023
Top 10 Stock Star Entertainment 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: Star Entertainment – Top 10 Stock in Australian Securities Exchange Index ASX 100
Star Entertainment is listed as a top 10 stock on May 11, 2023 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, providing mixed investment signals. Based on the Obermatt 360° Rank of 9 (9% performer), Obermatt issues an overall sell recommendation for Star Entertainment on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Australia |
| Industry | Casinos & Gaming |
| Index | ASX 100, ASX 200, ASX 300, Low Emissions |
| 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° Assessment Star Entertainment Sell
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 9 |
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ANALYSIS: With an Obermatt 360° Rank of 9 (better than 9% compared with alternatives), overall professional sentiment and engagement for the stock Star Entertainment are critical, mostly below average. The 360° Rank is based on consolidating four consolidated indicators, with three out of four indicators below average for Star Entertainment. Only the consolidated Value Rank has an attractive rank of 73, which means that the share price of Star Entertainment is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 73% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 7, 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. The consolidated Safety Rank has a riskier rank of 26, meaning the company has a riskier financing structure than 74% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 99% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 1. ...read more
RECOMMENDATION: With a 360° Rank of 9, Star Entertainment is worse than 91% of all alternative stock investment opportunities based on the Obermatt Method. This means that Star Entertainment shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 73. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 7), a riskier financing structure (Safety Rank of 26), and negative market sentiment in the professional investor community (Sentiment Rank of 1). This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Star Entertainment is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Star Entertainment. Only invest if you have solid reasons to believe that the sluggish growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Star Entertainment negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock Star Entertainment is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Star Entertainment. Analyst Opinions are at a rank of 26 (worse than 74% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 10 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 5, 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 95% of competitors). No wonder, the Professional Investors rank is only 27, which means that professional investors hold less stock in this company than in 73% of alternative investment opportunities. Pros tend to stay away from Star Entertainment, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), Star Entertainment has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Star Entertainment Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Star Entertainment shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Star Entertainment. Price-to-Sales (P/S) has a value of 82, which means that the stock price compared with what market professionals expect for future sales is lower than 82% of comparable companies, indicating a good value concerning Star Entertainment's revenue size. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio), which is more favorable than 100% of alternatives (0% of peers have a higher ratio). But expected dividend yields with an Obermatt Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while Price to Profit (or Price / Earnings, P/E) is higher than average with a Price-to-Profit Rank of 41, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a BUY recommendation based on Star Entertainment's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Star Entertainment may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Star Entertainment Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Star Entertainment 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 metrics below average for Star Entertainment. While Profit Growth has a good rank of 75, as professionals currently expect the company to grow its profits more than 75% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 1, which means that currently professionals expect the company to grow less than 99% of its competitors, while Capital Growth has a rank of 34 and Stock Returns have been below market median, with a rank of 3 (97% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a SELL recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Star Entertainment Debt Financing Safety below-average
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 7 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company Star Entertainment 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 Star Entertainment 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 Star Entertainment and the other two below average. Leverage is at a rank of 62 meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors.Refinancing is at a rank of 7, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 93% of its competitors. Liquidity is at a rank of 26, meaning that the company generates less profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 26 (worse than 74% compared with alternatives), Star Entertainment has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Star Entertainment are on the safer side. ...read more
Combined financial peformance: Star Entertainment Lowest Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| COMBINED | ||||||||
| COMBINED | 20 |
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ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), Star Entertainment (Casinos & Gaming, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Star Entertainment are a good value (attractively priced) with a consolidated Obermatt Value Rank of 73 (better than 73% of alternatives) but show below-average growth (Growth Rank of 7), and are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 20, is a sell recommendation based on Star Entertainment's financial characteristics. As the company Star Entertainment's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 7) and risky financing practices (Obermatt Safety Rank of 26), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 73% of comparable companies, may indicate 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. ...read more
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