January 16, 2025
Top 10 Stock Hon Hai Precision Industry 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: Hon Hai Precision Industry – Top 10 Stock in FTSE Taiwan Index
Hon Hai Precision Industry is listed as a top 10 stock on January 16, 2025 in the market index FTSE Taiwan 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 54 (high 54% performer), Obermatt assesses an overall buy recommendation for Hon Hai Precision Industry on January 16, 2025.
Snapshot: Obermatt Ranks
| Country | Taiwan |
| Industry | Electr. Manufacturing Services |
| Index | FTSE Taiwan |
| Size class | XX-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 Hon Hai Precision Industry Buy
| 360 METRICS | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| SENTIMENT | ||||||||
| SENTIMENT | 48 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hon Hai Precision Industry are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Hon Hai Precision Industry. Only the consolidated Value Rank has an attractive rank of 100, which means that the share price of Hon Hai Precision Industry 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 100% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 21, 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 43, meaning the company has a riskier financing structure than 57% 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 52% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 48. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, Hon Hai Precision Industry is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 100. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 21), a riskier financing structure than the competition (Safety Rank of 43), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 48) 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 Hon Hai Precision Industry 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 Hon Hai Precision Industry. 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 Hon Hai Precision Industry only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Hon Hai Precision Industry is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Hon Hai Precision Industry. Analyst Opinions are at a rank of 51 (better than 51% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 88 which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. But Analyst Opinions Change has a rank of 34, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Hon Hai Precision Industry. Furthermore, Market Pulse has a rank of 25, 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 75% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 48 (less encouraging than 52% compared with investment alternatives), Hon Hai Precision Industry has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Hon Hai Precision Industry Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2025, Hon Hai Precision Industry shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Hon Hai Precision Industry. Price-to-Sales is 100 which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value for Hon Hai Precision Industry's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 100% 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 93. Compared with other companies in the same industry, dividend yields of Hon Hai Precision Industry are expected to be higher than for 67% of all competitors (a Dividend Yield rank of 67). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Hon Hai Precision Industry'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 Hon Hai Precision Industry based on its detailed value metrics.
Growth Strategy: Hon Hai Precision Industry Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Hon Hai Precision Industry 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 three out of four metrics below average for Hon Hai Precision Industry. While Profit Growth has a good rank of 73, as professionals currently expect the company to grow its profits more than 73% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 13, which means that currently professionals expect the company to grow less than 87% of its competitors, while Capital Growth has a rank of 26 and Stock Returns have been below market median, with a rank of 25 (75% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Hon Hai Precision Industry Debt Financing Safety below-average
| SAFETY METRICS | January 16, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 99 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 23 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 43 |
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ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Hon Hai Precision Industry 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 Hon Hai Precision Industry 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 Hon Hai Precision Industry and the other two below average. Refinancing is at 99, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 99% of its competitors. But Leverage is high with a rank of 20, meaning the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. Liquidity is also on the riskier side with a rank of 23, meaning the company generates less profit to service its debt than 77% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Hon Hai Precision Industry 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 Hon Hai Precision Industry 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: Hon Hai Precision Industry Above-Average Financial Performance
| COMBINED PERFORMANCE | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 100 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| COMBINED | ||||||||
| COMBINED | 59 |
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ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Hon Hai Precision Industry (Electr. Manufacturing Services, Taiwan) shares have above-average financial characteristics compared with similar stocks. Shares of Hon Hai Precision Industry are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Hon Hai Precision Industry's financial characteristics. As the company Hon Hai Precision Industry's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 43), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 100% 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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