August 1, 2024
Top 10 Stock Harmony 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: Harmony – Top 10 Stock in Silver Mining and Production
Harmony is listed as a top 10 stock on August 01, 2024 in the market index Silver because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for Harmony on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Gold Production |
| Index | Copper, Energy Efficient, Human Rights, Gold, Silver, Uranium, Water Efficiency, JSE All Shares |
| 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 Harmony Buy
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| SENTIMENT | ||||||||
| SENTIMENT | 46 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock Harmony are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Harmony. The consolidated Growth Rank has a good rank of 99, 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. It ranks higher than 99% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 46 means that the share price of Harmony is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 54% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 48, which means that the company has a riskier financing structure than 52% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 46, indicating professional investors are more pessimistic about the stock than for 54% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, Harmony is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 99), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 46), the company is rather risky when it comes to financing (Safety Rank of 48). The negative market view on Harmony may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Harmony compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Harmony only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 46 (better than 46% compared with alternatives), overall professional sentiment and engagement for the stock Harmony 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 Harmony. Analyst Opinions are at a rank of 1 (worse than 99% 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 25, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 88, which means that professional investors hold more stock in this company than in 88% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 81, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 81% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Harmony and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 46 (less encouraging than 54% compared with investment alternatives), Harmony has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Harmony Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), Harmony 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 Harmony. Price-to-Profit (also referred to as price-earnings, P/E) is 67 which means that the stock price compared with what market professionals expect for future profits is lower than for 67% of comparable companies, indicating a good value concerning Harmony'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 44, which means that the stock price is lower as regards to invested capital than for 44% of comparable investments. On the other hand, Price-to-Sales is less favorable than 53% of alternatives (only 47% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 49% 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 46, is a hold recommendation based on Harmony'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: Harmony Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, Harmony 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 all four indicators above average for Harmony. Sales Growth has a value of 71, which means that, currently, professionals expect the company to grow more than 71% of its competitors. The same is valid for Profit Growth with a value of 84 and for Capital Growth with 72. In addition, Stock Returns had an above-average rank value of 98, which means they have been higher than 98% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Harmony exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Harmony Debt Financing Safety below-average
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 21 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 65 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
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ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company Harmony 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 Harmony 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 two out of three indicators above average for Harmony. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 65, meaning the company generates more profit to service its debt than 65% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 21, 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 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), Harmony has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Harmony. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Harmony Top Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 99 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| COMBINED | ||||||||
| COMBINED | 75 |
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ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), Harmony (Gold Production, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Harmony are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives), and are riskily financed (Safety Rank of 48, which means above-average debt burdens) but show above-average growth (Growth Rank of 99). ...read more
RECOMMENDATION: A Combined Rank of 75, is a strong buy recommendation based on Harmony's financial characteristics. As the company Harmony shows low value with an Obermatt Value Rank of 46 (54% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 99% of comparable companies (Obermatt Growth Rank is 99). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 48 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Harmony, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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