Fact based stock research
Formosa Chemicals & Fibre (TSEC:1326)

TW0001326007

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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.

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Formosa Chemicals & Fibre stock research in summary

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ANALYSIS: With an Obermatt Combined Rank of 5 (worse than 95% compared with investment alternatives), Formosa Chemicals & Fibre (Commodity Chemicals, Taiwan) shares have lower financial characteristics compared with similar stocks. Shares of Formosa Chemicals & Fibre are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 9), and are riskily financed (Safety Rank of 27), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 5, is a sell recommendation based on Formosa Chemicals & Fibre's financial characteristics. As the company Formosa Chemicals & Fibre's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 9), and risky financing practices (Obermatt Safety Rank of 27), 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. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	33
Growth Rank	9
Safety Rank	27
Combined Rank	5

Country	Taiwan
Industry	Commodity Chemicals
Index	Human Rights, FTSE Taiwan
Size class	XX-Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Formosa Chemicals & Fibre

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	19	21	33
GROWTH
GROWTH	70	3	69	9
SAFETY
SAFETY	100	34	20	27
SENTIMENT
SENTIMENT	n/a	1	43	^new
360° VIEW
360° VIEW	n/a	1	30	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Formosa Chemicals & Fibre is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	98	19	21	33
GROWTH
GROWTH	70	3	69	9
SAFETY
SAFETY	100	34	20	27
COMBINED
COMBINED	100	1	28	5

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Formosa Chemicals & Fibre the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Formosa Chemicals & Fibre shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Formosa Chemicals & Fibre. Expected dividend yields are higher than for 50% of comparable companies (a Dividend Yield rank of 50), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 62, which means that the stock price is lower compared with invested capital than for 62% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 41 which means that the stock price compared with what market professionals expect for future profits is higher than for 59% of comparable companies, indicating a low value concerning Formosa Chemicals & Fibre's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Formosa Chemicals & Fibre with a rank of 7. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 93% of comparable companies, indicating a low value concerning Formosa Chemicals & Fibre's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Formosa Chemicals & Fibre's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Formosa Chemicals & Fibre may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	67	25	25	41
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	84	21	13	7
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	92	38	38	62
DIVIDEND YIELD
DIVIDEND YIELD	88	27	36	50
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	98	19	21	33

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Formosa Chemicals & Fibre; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Formosa Chemicals & Fibre 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 indicators below average for Formosa Chemicals & Fibre. Only Capital Growth has a good rank of 85, which means that currently professionals expect the company to grow its invested capital more than 25% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 4 which means that currently professionals expect the company to grow less than 96% of its competitors. Profit Growth with a rank of 25 and Stock Returns with a rank of 9 are also low (below 91% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 9, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Formosa Chemicals & Fibre is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	70	4	41	4
PROFIT GROWTH
PROFIT GROWTH	29	12	82	25
CAPITAL GROWTH
CAPITAL GROWTH	n/a	52	98	85
STOCK RETURNS
STOCK RETURNS	46	33	19	9
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	70	3	69	9

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Formosa Chemicals & Fibre.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company Formosa Chemicals & Fibre 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 Formosa Chemicals & Fibre 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 Formosa Chemicals & Fibre and the other two below average. Leverage is at a rank of 54 meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors.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. Liquidity is at a rank of 15, meaning that the company generates less profit to service its debt than 85% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), Formosa Chemicals & Fibre 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 Formosa Chemicals & Fibre are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Formosa Chemicals & Fibre and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	74	60	54	54
REFINANCING
REFINANCING	80	49	35	41
LIQUIDITY
LIQUIDITY	100	28	12	15
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	34	20	27

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Formosa Chemicals & Fibre and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	3	2	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	4	60	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	39	25	^new
MARKET PULSE
MARKET PULSE	n/a	15	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	1	43	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Formosa Chemicals & Fibre.
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