July 27, 2023
Top 10 Stock Harvey Norman 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: Harvey Norman – Top 10 Stock in Australian Securities Exchange Index ASX 200
Harvey Norman is listed as a top 10 stock on July 27, 2023 in the market index ASX 200 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 negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 6 (6% performer), Obermatt issues an overall sell recommendation for Harvey Norman on July 27, 2023.
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 Harvey Norman Sell
| 360 METRICS | July 27, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 3 |
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| 360° VIEW | ||||||||
| 360° VIEW | 6 |
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ANALYSIS: With an Obermatt 360° View of 6 (better than 6% compared with alternatives), overall professional sentiment and financial characteristics for the stock Harvey Norman are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Harvey Norman. The consolidated Value Rank has an attractive rank of 69, which means that the share price of Harvey Norman 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 69% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 53. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 3. Professional investors are more confident in 97% other stocks. The consolidated Growth Rank also has a low rank of 3, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 97 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 6, Harvey Norman is worse than 94% of all alternative stock investment opportunities based on the Obermatt Method. This means that Harvey Norman shares are on the riskier side for investors. The picture is mixed here. The stock seems to be a good value (Value Rank of 69), and the financing structure is on the safer side (Safety Rank of 53). However, sentiment in the professional investor community is below-average (Sentiment Rank of 3), as is the growth momentum for the company (Growth Rank of 3). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still 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 Harvey Norman negative
ANALYSIS: With an Obermatt Sentiment Rank of 3 (better than 3% compared with alternatives), overall professional sentiment and engagement for the stock Harvey Norman 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 Harvey Norman. Analyst Opinions are at a rank of 11 (worse than 89% 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 7 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 38, 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 62% of competitors). No wonder, the Professional Investors rank is only 35, which means that professional investors hold less stock in this company than in 65% of alternative investment opportunities. Pros tend to stay away from Harvey Norman, 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 3 (less encouraging than 97% compared with investment alternatives), Harvey Norman 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: Harvey Norman Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Harvey Norman shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Harvey Norman. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 74 which means that the stock price compared with what market professionals expect for future profits is lower than for 74% of comparable companies, indicating a good value concerning Harvey Norman's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 70, and for Dividend Yield with a Dividend Yield Rank of 90. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 72% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 28). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on Harvey Norman's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Harvey Norman has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Harvey Norman shares. ...read more
Growth Strategy: Harvey Norman Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Harvey Norman 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 all four metrics below average for Harvey Norman. Sales Growth has a rank of 12, which means that currently professionals expect the company to grow less than 88% of its competitors. The same is valid for Profit Growth, with a rank of 19, and Capital Growth with 14. In addition, Stock Returns have a below market rank of 39, which means that the stock returns have recently been below 61% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Harvey Norman Debt Financing Safety above-average
| SAFETY METRICS | July 27, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Harvey Norman has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Harvey Norman is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Harvey Norman. Leverage is at 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Refinancing is at a rank of 64, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Finally, Liquidity is also good at a rank of 52, which means that the company generates more profit to service its debt than 52% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Harvey Norman has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Harvey Norman Lowest Financial Performance
| COMBINED PERFORMANCE | July 27, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 24 |
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ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Harvey Norman (General Merchandise Stores, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Harvey Norman are a good value (attractively priced) with a consolidated Value Rank of 69 (better than 69% of alternatives), are safely financed (Safety Rank of 53, which means low debt burdens), but show below-average growth (Growth Rank of 3). ...read more
RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on Harvey Norman's financial characteristics. As the company Harvey Norman's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 3) while being safely financed (Obermatt Safety Rank of 53), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 69% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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