April 11, 2024
Top 10 Stock Exxaro 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: Exxaro – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Exxaro is listed as a top 10 stock on April 11, 2024 in the market index JSE All Shares 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 where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Exxaro on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Coal & Consumable Fuels |
| Index | Low Emissions, Energy Efficient, Water Efficiency, JSE All Shares |
| 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 Exxaro Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| SENTIMENT | ||||||||
| SENTIMENT | 96 |
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| 360° VIEW | ||||||||
| 360° VIEW | 94 |
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ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Exxaro are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Exxaro. The consolidated Value Rank has an attractive rank of 84, which means that the share price of Exxaro is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 84% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 78. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 96. But the consolidated Growth Rank has a low rank of 44, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 56 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, Exxaro is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 84), secure financing practices (Safety Rank of 78), and positive market sentiment in the professional investor community (Sentiment Rank of 96). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 44), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Exxaro is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Exxaro very positive
ANALYSIS: With an Obermatt Sentiment Rank of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Exxaro is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Exxaro. 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. Analyst Opinions Change is also positive with a rank of 93, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Exxaro. The Professional Investors rank is 76, which means that currently, professional investors hold more stock in this company than in 76% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 59 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 59% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 96 (more positive than 96% compared with investment alternatives), Exxaro has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Exxaro stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Exxaro Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2024, Exxaro shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Exxaro. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 93 which means that the stock price compared with what market professionals expect for future profits is lower than for 93% of comparable companies, indicating a good value concerning Exxaro's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 74, and for Dividend Yield with a Dividend Yield Rank of 98. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 63% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 37). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a buy recommendation based on Exxaro's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Exxaro has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Exxaro shares. ...read more
Growth Strategy: Exxaro Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 44 (better than 44% compared with alternatives), Exxaro 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 Exxaro. Sales Growth has a rank of 51 which means that currently professionals expect the company to grow more than 51% of its competitors. Stock Returns are also above average with a rank of 55. But Capital Growth has only a rank of 30, which means that currently professionals expect the company to grow its invested capital less than 70% of its competitors. Profit Growth is also low, with a rank of only 34, 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 44, 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 55% 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: Exxaro Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 76 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 78 |
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ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company Exxaro has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Exxaro 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, where all three are above average for Exxaro. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 81, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. Finally, Liquidity is also good at a rank of 50, which means that the company generates more profit to service its debt than 50% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), Exxaro has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Exxaro Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Exxaro (Coal & Consumable Fuels, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Exxaro are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives), are safely financed (Safety Rank of 78, which means low debt burdens), but show below-average growth (Growth Rank of 44). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Exxaro's financial characteristics. As the company Exxaro's key financial metrics exhibit good value (Obermatt Value Rank of 84) but low growth (Obermatt Growth Rank of 44) while being safely financed (Obermatt Safety Rank of 78), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 84% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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