April 18, 2024
Top 10 Stock GWA Hold 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: GWA – Top 10 Stock in SDG 6: Clean Water and Sanitation
GWA is listed as a top 10 stock on April 18, 2024 in the market index SDG 6 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 47 (47% performer), Obermatt assesses an overall hold recommendation for GWA on April 18, 2024.
Snapshot: Obermatt Ranks
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 GWA Hold
| 360 METRICS | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 36 |
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| 360° VIEW | ||||||||
| 360° VIEW | 47 |
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ANALYSIS: With an Obermatt 360° View of 47 (better than 47% compared with alternatives), overall professional sentiment and financial characteristics for the stock GWA are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for GWA. The consolidated Value Rank has an attractive rank of 51, which means that the share price of GWA is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 51% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 81, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 36. Professional investors are more confident in 64% other stocks. Worryingly, the company has risky financing, with a Safety rank of 39. This means 61% of comparable companies have a safer financing structure than GWA. ...read more
RECOMMENDATION: With a consolidated 360° View of 47, GWA is worse than 53% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 51 and the Growth Rank above-average at 81, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 36. In addition, the company financing structure is on the riskier side (Safety Rank of 39). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for GWA only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 36 (better than 36% compared with alternatives), overall professional sentiment and engagement for the stock GWA is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for GWA. Analyst Opinions are at a rank of 34 (worse than 66% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in GWA. More encouragingly, the Professional Investors rank is 90, which means that professional investors hold more stock in this company than in 90% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 23, 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 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 36 (less encouraging than 64% compared with investment alternatives), GWA has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for GWA. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: GWA Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), GWA 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 GWA. Price-to-Profit (also referred to as price-earnings, P/E) is 57 which means that the stock price compared with what market professionals expect for future profits is lower than for 57% of comparable companies, indicating a good value concerning GWA's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 27, which means that the stock price is lower as regards to invested capital than for 27% of comparable investments. On the other hand, Price-to-Sales is less favorable than 63% of alternatives (only 37% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 2% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on GWA's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: GWA Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, GWA shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for GWA. Capital Growth has a rank of 93, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 39, which means that, currently, professionals expect the company to grow less than 61% of its competitors, and Profit Growth is also low at a rank of 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy 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 GWA, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: GWA Debt Financing Safety below-average
| SAFETY METRICS | April 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 33 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% compared with alternatives), the company GWA 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 GWA 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 GWA. Liquidity is at 39, meaning that the company generates less profit to service its debt than 61% 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 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Finally, Refinancing is at a rank of 33 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 67% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% compared with alternatives), GWA has a financing structure that is 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: GWA Above-Average Financial Performance
| COMBINED PERFORMANCE | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), GWA (Building Products, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of GWA are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), show above-average growth (Growth Rank of 81) but are riskily financed (Safety Rank of 39), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on GWA's financial characteristics. As the company GWA's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 51) and above-average growth (Obermatt Growth Rank of 81), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 39) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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