September 12, 2024
Top 10 Stock Hitachi Construction Machinery 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: Hitachi Construction Machinery – Top 10 Stock in Nikkei 225 Index
Hitachi Construction Machinery is listed as a top 10 stock on September 12, 2024 in the market index Nikkei 225 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 16 (16% performer), Obermatt issues an overall sell recommendation for Hitachi Construction Machinery on September 12, 2024.
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 Sell
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 24 |
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| 360° VIEW | ||||||||
| 360° VIEW | 16 |
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ANALYSIS: With an Obermatt 360° View of 16 (better than 16% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hitachi Construction Machinery are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Hitachi Construction Machinery. Only the consolidated Value Rank has an attractive rank of 91, 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 91% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 1, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 34, meaning the company has a riskier financing structure than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 76% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 24. ...read more
RECOMMENDATION: With a consolidated 360° View of 16, Hitachi Construction Machinery is worse than 84% of all alternative stock investment opportunities based on the Obermatt Method. This means that Hitachi Construction Machinery shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 91. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 1), a riskier financing structure than the competition (Safety Rank of 34), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 24) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of Hitachi Construction Machinery is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Hitachi Construction Machinery. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Hitachi Construction Machinery negative
ANALYSIS: With an Obermatt Sentiment Rank of 24 (better than 24% compared with alternatives), overall professional sentiment and engagement for the stock Hitachi Construction Machinery is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Hitachi Construction Machinery. Analyst Opinions are at a rank of 16 (worse than 84% 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 28, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 15, which means that professional investors hold less stock in this company than in 85% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Hitachi Construction Machinery is Market Pulse, with a rank of 69, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 69% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 24 (less encouraging than 76% compared with investment alternatives), Hitachi Construction Machinery has a reputation among professional investors that is far 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: Hitachi Construction Machinery Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 91 (better than 91% compared with alternatives) for 2024, 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 79 which means that the stock price compared with what market professionals expect for future sales is lower than for 79% 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 97% 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 72. Compared with other companies in the same industry, dividend yields of Hitachi Construction Machinery are expected to be higher than for 94% of all competitors (a Dividend Yield rank of 94). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 91, is a 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 negative
ANALYSIS: With an Obermatt Growth Rank of 1 (better than 1% compared with alternatives), Hitachi Construction Machinery 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 Hitachi Construction Machinery. Sales Growth has a rank of 15, which means that currently professionals expect the company to grow less than 85% of its competitors. The same is valid for Profit Growth, with a rank of 24, and Capital Growth with 20. In addition, Stock Returns have a below market rank of 5, which means that the stock returns have recently been below 95% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 1, 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: Hitachi Construction Machinery Debt Financing Safety below-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% 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 69, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. But Leverage is high with a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Liquidity is also on the riskier side with a rank of 27, meaning the company generates less profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% 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 Lowest Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 20 |
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ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), Hitachi Construction Machinery (Heavy Machinery, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Hitachi Construction Machinery are a good value (attractively priced) with a consolidated Value Rank of 91 (better than 91% of alternatives) but show below-average growth (Growth Rank of 1), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 20, is a sell 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 91) but low growth (Obermatt Growth Rank of 1) and risky financing practices (Obermatt Safety Rank of 34), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 91% 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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