June 22, 2023
Top 10 Stock Hitachi Construction Machinery 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: Hitachi Construction Machinery – Top 10 Stock in Nikkei 225 Index
Hitachi Construction Machinery is listed as a top 10 stock on June 22, 2023 in the market index Nikkei 225 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for Hitachi Construction Machinery on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Heavy Machinery |
| Index | Nikkei 225 |
| 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 Hitachi Construction Machinery Strong Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 76 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 76 |
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ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Hitachi Construction Machinery are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Hitachi Construction Machinery. The consolidated Value Rank has an attractive rank of 76, which means that the share price of Hitachi Construction Machinery is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 76% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 86, which means that professional investors are more optimistic about the stock than for 86% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 29, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 33, meaning the company has a riskier financing structure than 67 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 76, Hitachi Construction Machinery is better positioned than 76% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 76) and positive market sentiment in the professional investor community (Sentiment Rank of 86), but growth expectations are below-average (Growth Rank of 29) and the financing structure is on the risky side(Safety Rank of 33). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (high sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Hitachi Construction Machinery is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Hitachi Construction Machinery very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Hitachi Construction Machinery is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Hitachi Construction Machinery. Analyst Opinions are at a rank of 35 (worse than 65% 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 60, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Hitachi Construction Machinery. Even better, the Professional Investors rank is 98, meaning that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 75, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 75% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Hitachi Construction Machinery has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Hitachi Construction Machinery Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 76 (better than 76% compared with alternatives) for 2023, Hitachi Construction Machinery shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Hitachi Construction Machinery. Price-to-Sales is 70 which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value for Hitachi Construction Machinery's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 88% 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 58. Compared with other companies in the same industry, dividend yields of Hitachi Construction Machinery are expected to be higher than for 77% of all competitors (a Dividend Yield rank of 77). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 76, is a strong buy recommendation based on Hitachi Construction Machinery'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 Hitachi Construction Machinery based on its detailed value metrics.
Growth Strategy: Hitachi Construction Machinery Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Hitachi Construction Machinery 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 Hitachi Construction Machinery. Profit Growth has a rank of 59, which means that currently professionals expect the company to grow its profits more than 59% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has a below the median rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Capital Growth also has a lower rank of 42. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a HOLD recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Hitachi Construction Machinery. ...read more
Safety Strategy: Hitachi Construction Machinery Debt Financing Safety below-average
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 56 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 42 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
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ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company Hitachi Construction Machinery 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 Hitachi Construction Machinery 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 just one indicator above average for Hitachi Construction Machinery and the other two below average. Refinancing is at 56, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 56% of its competitors. But Leverage is high with a rank of 15, meaning the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. Liquidity is also on the riskier side with a rank of 42, meaning the company generates less profit to service its debt than 58% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 33 (worse than 67% compared with alternatives), Hitachi Construction Machinery has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Hitachi Construction Machinery are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Hitachi Construction Machinery Below-Average Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 76 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Hitachi Construction Machinery (Heavy Machinery, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Hitachi Construction Machinery are a good value (attractively priced) with a consolidated Obermatt Value Rank of 76 (better than 76% of alternatives) but show below-average growth (Growth Rank of 29), and are riskily financed (Safety Rank of 33), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 42, is a hold recommendation based on Hitachi Construction Machinery's financial characteristics. As the company Hitachi Construction Machinery's key financial metrics exhibit good value (Obermatt Value Rank of 76) but low growth (Obermatt Growth Rank of 29) and risky financing practices (Obermatt Safety Rank of 33), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 76% of comparable companies, may indicate 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. ...read more
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