October 17, 2024
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 Rare Earth Mining and Production
FQM is listed as a top 10 stock on October 17, 2024 in the market index Rare Earth because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 1 (1% performer), Obermatt issues an overall sell recommendation for FQM on October 17, 2024.
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 | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| SENTIMENT | ||||||||
| SENTIMENT | 11 |
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| 360° VIEW | ||||||||
| 360° VIEW | 1 |
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ANALYSIS: With an Obermatt 360° View of 1 (better than 1% 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 all four indicators below average for FQM. The consolidated Value Rank has a low rank of 30 which means that the share price of FQM is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 70% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 23, 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. This means that growth is lower than for 23% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 18, which means that the company has a riskier financing structure than 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 11, which means that professional investors are more pessimistic about the stock than for 89% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 1, FQM is worse than 99% of all alternative stock investment opportunities based on the Obermatt Method. This means that FQM shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 11. The negative market view on FQM may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While FQM may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for FQM negative
ANALYSIS: With an Obermatt Sentiment Rank of 11 (better than 11% compared with alternatives), overall professional sentiment and engagement for the stock FQM is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for FQM. Analyst Opinions are at a rank of 35 (worse than 65% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 48 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 2, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 98% of competitors). No wonder, the Professional Investors rank is only 24, which means that professional investors hold less stock in this company than in 76% of alternative investment opportunities. Pros tend to stay away from FQM, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 11 (less encouraging than 89% compared with investment alternatives), FQM has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: FQM Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), FQM shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for FQM. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value concerning FQM's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 80% of alternatives (20% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 3, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 30, is a hold recommendation based on FQM's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for FQM may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: FQM Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), FQM 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 half of the indicators below and half above average for FQM. Sales Growth has a rank of 84 which means that currently, professionals expect the company to grow more than 84% of its competitors. Capital Growth is also above 1% of competitors with a rank of 52. But Profit Growth only has a rank of 1, which means that currently professionals expect the company to grow its profits less than 99% of its competitors. And Stock Returns have also been below average with a rank of only 7. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell 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 | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 10 |
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| REFINANCING | ||||||||
| REFINANCING | 67 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 22 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 18 |
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ANALYSIS: With an Obermatt Safety Rank of 18 (better than 18% 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 just one indicator above average for FQM and the other two below average. Refinancing is at 67, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. But Leverage is high with a rank of 10, meaning the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. Liquidity is also on the riskier side with a rank of 22, meaning the company generates less profit to service its debt than 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 18 (worse than 82% compared with alternatives), FQM has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for FQM are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: FQM Lowest Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| COMBINED | ||||||||
| COMBINED | 4 |
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ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), FQM (Copper, Canada) shares have lower financial characteristics compared with similar stocks. Shares of FQM are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives), show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 18), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on FQM's financial characteristics. As the company FQM's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 30), low growth (Obermatt Growth Rank of 23), and risky financing practices (Obermatt Safety Rank of 18), 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. ...read more
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