Fact based stock research
Formosa Plastics (TSEC:1301)
TW0001301000
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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.
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Formosa Plastics stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 11 (worse than 89% compared with investment alternatives), Formosa Plastics (Commodity Chemicals, Taiwan) shares have lower financial characteristics compared with similar stocks. Shares of Formosa Plastics are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives), show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 11, is a sell recommendation based on Formosa Plastics's financial characteristics. As the company Formosa Plastics's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 15), low growth (Obermatt Growth Rank of 27), and risky financing practices (Obermatt Safety Rank of 31), 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
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360° Viewnew| Country | Taiwan |
| Industry | Commodity Chemicals |
| Index | Low Emissions, FTSE Taiwan |
| Size class | X-Large |
19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Formosa Plastics
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 74 |
|
39 |
|
19 |
|
15 |
|
| GROWTH | ||||||||
| GROWTH | 81 |
|
7 |
|
63 |
|
27 |
|
| SAFETY | ||||||||
| SAFETY | 84 |
|
45 |
|
61 |
|
31 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
55 |
|
10 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
13 |
|
30 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 11 (worse than 89% compared with investment alternatives), Formosa Plastics (Commodity Chemicals, Taiwan) shares have lower financial characteristics compared with similar stocks. Shares of Formosa Plastics are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives), show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 11, is a sell recommendation based on Formosa Plastics's financial characteristics. As the company Formosa Plastics's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 15), low growth (Obermatt Growth Rank of 27), and risky financing practices (Obermatt Safety Rank of 31), 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
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 74 |
|
39 |
|
19 |
|
15 |
|
| GROWTH | ||||||||
| GROWTH | 81 |
|
7 |
|
63 |
|
27 |
|
| SAFETY | ||||||||
| SAFETY | 84 |
|
45 |
|
61 |
|
31 |
|
| COMBINED | ||||||||
| COMBINED | 98 |
|
7 |
|
53 |
|
11 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Formosa Plastics shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Formosa Plastics. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 55, which means that the stock price is lower compared with invested capital than for 55% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 20 which means the stock price compared with what market professionals expect for future profits is higher than 80% of comparable companies, indicating a low value concerning Formosa Plastics's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 55 and for the dividend yields rank which is lower than for 81% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a sell recommendation based on Formosa Plastics's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Formosa Plastics, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. 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) | 37 |
|
12 |
|
9 |
|
20 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 82 |
|
38 |
|
28 |
|
10 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 72 |
|
27 |
|
26 |
|
55 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 76 |
|
98 |
|
48 |
|
19 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 74 |
|
39 |
|
19 |
|
15 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Formosa Plastics 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 three out of four indicators below average for Formosa Plastics. Only Capital Growth has a good rank of 91, which means that currently professionals expect the company to grow its invested capital more than 17% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 21 which means that currently professionals expect the company to grow less than 79% of its competitors. Profit Growth with a rank of 17 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 27, is a hold 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 Plastics 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 |
|
11 |
|
69 |
|
21 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 92 |
|
9 |
|
23 |
|
17 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
37 |
|
88 |
|
91 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 54 |
|
57 |
|
29 |
|
9 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 81 |
|
7 |
|
63 |
|
27 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Formosa Plastics 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 Plastics 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 Plastics and the other two below average. Leverage is at a rank of 68 meaning the company has a below-average debt-to-equity ratio. It has less debt than 68% of its competitors.Refinancing is at a rank of 21, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 79% of its competitors. Liquidity is at a rank of 13, meaning that the company generates less profit to service its debt than 87% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Formosa Plastics 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 Plastics are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Formosa Plastics 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 |
|
68 |
|
72 |
|
68 |
|
| REFINANCING | ||||||||
| REFINANCING | 32 |
|
33 |
|
21 |
|
21 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
|
41 |
|
65 |
|
13 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 84 |
|
45 |
|
61 |
|
31 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
93 |
|
21 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
6 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
86 |
|
21 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
9 |
|
7 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
55 |
|
10 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Formosa Plastics from December 19, 2024.
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