Fact based stock research
Fortescue (ASX:FMG)

AU000000FMG4

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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.

(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.

Fortescue stock research in summary

fmgl.com.au

ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Fortescue (Steel, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Fortescue are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives) and show below-average growth (Growth Rank of 5) but are safely financed (Safety Rank of 52), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Fortescue's financial characteristics. As the company Fortescue's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 41) and low growth (Obermatt Growth Rank of 5), 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. In this case, good financing practices (Obermatt Safety Rank of 52) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for 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	41
Growth Rank	5
Safety Rank	52
Combined Rank	16

Country	Australia
Industry	Steel
Index	ASX 100, ASX 200, ASX 300, ASX 50, Low Emissions, Human Rights
Size class	XX-Large

This stock has achievements: Top 10 Stock.

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

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

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

Research History: Fortescue

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	79	39	39	41
GROWTH
GROWTH	32	1	41	5
SAFETY
SAFETY	74	67	45	52
SENTIMENT
SENTIMENT	n/a	78	66	^new
360° VIEW
360° VIEW	n/a	35	34	^new

Most recent update of the stock research: 19-Dec-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 Fortescue is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	79	39	39	41
GROWTH
GROWTH	32	1	41	5
SAFETY
SAFETY	74	67	45	52
COMBINED
COMBINED	100	14	33	16

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Fortescue the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Fortescue shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Fortescue. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 85% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 25 which means that the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning Fortescue's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 42 which means that the stock price compared with what market professionals expect for future profit levels is higher than 58% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 23 is also low. Compared with invested capital, the stock price is higher than for 77% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Fortescue's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Fortescue? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Fortescue only if they reasonably expect the low current profit levels to be transitory. 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)	58	16	12	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	91	36	49	42
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	38	11	13	23
DIVIDEND YIELD
DIVIDEND YIELD	100	85	94	85
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	79	39	39	41

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Fortescue; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 5 (better than 5% compared with alternatives), Fortescue 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 all four metrics below average for Fortescue. Sales Growth has a rank of 6, which means that currently professionals expect the company to grow less than 94% of its competitors. The same is valid for Profit Growth, with a rank of 18, and Capital Growth with 35. In addition, Stock Returns have a below market rank of 13, which means that the stock returns have recently been below 87% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 5, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. 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 low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	50	8	6	6
PROFIT GROWTH
PROFIT GROWTH	19	10	58	18
CAPITAL GROWTH
CAPITAL GROWTH	n/a	15	41	35
STOCK RETURNS
STOCK RETURNS	32	35	79	13
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	32	1	41	5

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Fortescue.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Fortescue 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 Fortescue 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 Fortescue. Liquidity is at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 35, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 65% of its competitors. Leverage is also high at a rank of 44, which means that the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Fortescue has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	78	54	42	44
REFINANCING
REFINANCING	2	37	25	35
LIQUIDITY
LIQUIDITY	93	85	77	75
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	74	67	45	52

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Fortescue 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	7	3	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	86	97	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	78	87	^new
MARKET PULSE
MARKET PULSE	n/a	69	59	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	78	66	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Fortescue.
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