June 22, 2023
Top 10 Stock FQM 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: FQM – Top 10 Stock in Iron & Steel Mining and Production
FQM is listed as a top 10 stock on June 22, 2023 in the market index Iron 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, conveying mixed investment signals. Based on the Obermatt 360° View of 18 (18% performer), Obermatt issues an overall sell recommendation for FQM on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Copper |
| Index | Copper, Human Rights, Iron, Lithium, Low Waste, Rare Earth, Renewables Users, Recycling, Silver, Uranium, TSX Composite |
| Size class | X-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 FQM Sell
| 360 METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 54 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 31 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 14 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 42 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 18 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 18 (better than 18% compared with alternatives), overall professional sentiment and financial characteristics for the stock FQM are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for FQM. Only the consolidated Value Rank has an attractive rank of 54, which means that the share price of FQM is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 54% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 31, 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 14, meaning the company has a riskier financing structure than 86% 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 58% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 42. ...read more
RECOMMENDATION: With a 360° View of 18, FQM is worse than 82% of all alternative stock investment opportunities based on the Obermatt Method. This means that FQM 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 54. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 31), a riskier financing structure than the competition (Safety Rank of 14), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 42) is negative. 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 FQM 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 FQM. Only invest if you have solid reasons to believe that the low 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 FQM only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock FQM is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for FQM. Analyst Opinions are at a rank of 55 (better than 55% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 55, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in FQM. Finally, 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. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), FQM has a reputation among professional investors that is below that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 12, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 88% of competitors). This could mean future risks and should make investors careful. Attention to negative news for FQM is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: FQM Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), FQM shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for FQM. 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 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 46 which means that the stock price compared with what market professionals expect for future profits is higher than for 54% of comparable companies, indicating a low value concerning FQM's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for FQM with a rank of 43. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 57% of comparable companies, indicating a low value concerning FQM's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a BUY recommendation based on FQM'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, FQM 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. ...read more
Growth Strategy: FQM Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), FQM 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 FQM. Sales Growth has a rank of 52 which means that currently, professionals expect the company to grow more than 52% of its competitors. Capital Growth is also above 12% of competitors with a rank of 94. But Profit Growth only has a rank of 12, which means that currently professionals expect the company to grow its profits less than 88% of its competitors. And Stock Returns have also been below average with a rank of only 29. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a HOLD recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: FQM Debt Financing Safety risky
| SAFETY METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 16 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 41 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company FQM has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of FQM 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 all three metrics below average for FQM. Liquidity is at 24, meaning that the company generates less profit to service its debt than 76% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Finally, 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. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 14 (worse than 86% compared with alternatives), FQM has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: FQM Lowest Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 54 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 31 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 24 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 16 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), FQM (Copper, Canada) shares have lower financial characteristics compared with similar stocks. Shares of FQM are a good value (attractively priced) with a consolidated Obermatt Value Rank of 54 (better than 54% of alternatives) but show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 16, is a sell recommendation based on FQM's financial characteristics. As the company FQM's key financial metrics exhibit good value (Obermatt Value Rank of 54) but low growth (Obermatt Growth Rank of 31) and risky financing practices (Obermatt Safety Rank of 14), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 54% 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.