March 14, 2024
Top 10 Stock GATX Buy 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: GATX – Top 10 Stock in Employee Health Leaders in the United States
GATX is listed as a top 10 stock on March 14, 2024 in the market index Employee Health US because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 55 (high 55% performer), Obermatt assesses an overall buy recommendation for GATX on March 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Trading & Distribution |
| Index | Dividends USA, Employee Health US, S&P MIDCAP |
| Size class | 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 GATX Buy
| 360 METRICS | March 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 43 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 4 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 89 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 55 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 55 (better than 55% compared with alternatives), overall professional sentiment and financial characteristics for the stock GATX are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for GATX. The consolidated Sentiment Rank has a good rank of 89, which means that professional investors are more optimistic about the stock than for 89% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 43, which means that the share price of GATX is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 47, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 47% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 4 which means that the company has a riskier financing structure than 96% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 55, GATX is better positioned than 55% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 89) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of GATX̣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for GATX very positive
ANALYSIS: With an Obermatt Sentiment Rank of 89 (better than 89% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock GATX is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for GATX. Analyst Opinions are at a rank of 74 (better than 74% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in GATX. The Professional Investors rank is 83, which means that currently, professional investors hold more stock in this company than in 83% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 90 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 90% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 89 (more positive than 89% compared with investment alternatives), GATX has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean GATX stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: GATX Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), GATX 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 GATX. Expected dividend yields are higher than for 89% of comparable companies (a Dividend Yield rank of 89), 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 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 13 which means that the stock price compared with what market professionals expect for future profits is higher than for 87% of comparable companies, indicating a low value concerning GATX's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for GATX with a rank of 41. This 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 GATX's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on GATX'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, GATX 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: GATX Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), GATX 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 GATX. Capital Growth has a rank of 58, which means that currently professionals expect the company to grow its invested capital more than 42% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 61 (above 61% of alternative investments). But Sales Growth has only a rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Profit Growth is also low at a rank of 42. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for GATX, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: GATX Debt Financing Safety risky
| SAFETY METRICS | March 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 9 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 38 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 3 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 4 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 4 (better than 4% compared with alternatives), the company GATX 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 GATX 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 GATX. Liquidity is at 3, meaning that the company generates less profit to service its debt than 97% 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 9, meaning the company has an above-average debt-to-equity ratio. It has more debt than 91% of its competitors. Finally, Refinancing is at a rank of 38 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 4 (worse than 96% compared with alternatives), GATX 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.
Combined financial peformance: GATX Top Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 43 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 3 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 76 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), GATX (Trading & Distribution, USA) shares have much better financial characteristics than comparable stocks. Shares of GATX are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives), show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 4), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on GATX's financial characteristics. As the company GATX's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 43), low growth (Obermatt Growth Rank of 47), and risky financing practices (Obermatt Safety Rank of 4), 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.