September 26, 2024
Top 10 Stock Hero Motocorp Strong 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: Hero Motocorp – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
Hero Motocorp is listed as a top 10 stock on September 26, 2024 in the market index CNX Nifty 50 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for Hero Motocorp on September 26, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Motorcycle Manufacturers |
| Index | CNX Nifty 50 |
| 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 Hero Motocorp Strong Buy
| 360 METRICS | September 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| SENTIMENT | ||||||||
| SENTIMENT | 88 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Hero Motocorp are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Hero Motocorp. The consolidated Value Rank has an attractive rank of 81, which means that the share price of Hero Motocorp is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 81% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 58. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 88. But the consolidated Growth Rank has a low rank of 33, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 67 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, Hero Motocorp is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 81), secure financing practices (Safety Rank of 58), and positive market sentiment in the professional investor community (Sentiment Rank of 88). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 33), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Hero Motocorp is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Hero Motocorp very positive
ANALYSIS: With an Obermatt Sentiment Rank of 88 (better than 88% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Hero Motocorp is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Hero Motocorp. Analyst Opinions are at a rank of 59 (better than 59% 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 Hero Motocorp. The Professional Investors rank is 96, which means that currently, professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 66 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 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 88 (more positive than 88% compared with investment alternatives), Hero Motocorp 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 Hero Motocorp 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: Hero Motocorp Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, Hero Motocorp shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Hero Motocorp. Price-to-Sales is 66 which means that the stock price compared with what market professionals expect for future sales is lower than for 66% of comparable companies, indicating a good value for Hero Motocorp's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 76% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52. Compared with other companies in the same industry, dividend yields of Hero Motocorp are expected to be higher than for 79% of all competitors (a Dividend Yield rank of 79). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Hero Motocorp's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Hero Motocorp based on its detailed value metrics.
Growth Strategy: Hero Motocorp Growth Momentum low
| GROWTH METRICS | September 26, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 19 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 32 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 52 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 89 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 33 |
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ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Hero Motocorp 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 Hero Motocorp. Capital Growth has a rank of 52, which means that currently professionals expect the company to grow its invested capital more than 32% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 89 (above 89% of alternative investments). But Sales Growth has only a rank of 19, which means that, currently, professionals expect the company to grow less than 81% of its competitors, and Profit Growth is also low at a rank of 32. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, 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 Hero Motocorp, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Hero Motocorp Debt Financing Safety above-average
| SAFETY METRICS | September 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 70 |
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| REFINANCING | ||||||||
| REFINANCING | 27 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 79 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
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ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Hero Motocorp 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 Hero Motocorp 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, with two out of three indicators above average for Hero Motocorp. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 79, meaning the company generates more profit to service its debt than 79% 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 27, 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 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 58 (better than 58% compared with alternatives), Hero Motocorp has a financing structure that is safer 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 Hero Motocorp. 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: Hero Motocorp Above-Average Financial Performance
| COMBINED PERFORMANCE | September 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 79 |
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| COMBINED | ||||||||
| COMBINED | 69 |
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ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), Hero Motocorp (Motorcycle Manufacturers, India) shares have above-average financial characteristics compared with similar stocks. Shares of Hero Motocorp are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives), are safely financed (Safety Rank of 58, which means low debt burdens), but show below-average growth (Growth Rank of 33). ...read more
RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on Hero Motocorp's financial characteristics. As the company Hero Motocorp's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 33) while being safely financed (Obermatt Safety Rank of 58), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 81% 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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