July 6, 2023
Top 10 Stock Housing Development Finance Hold 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: Housing Development Finance – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
Housing Development Finance is listed as a top 10 stock on July 06, 2023 in the market index CNX Nifty 50 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 27 (27% performer), Obermatt assesses an overall hold recommendation for Housing Development Finance on July 06, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Other Financial Services |
| Index | BSE Sensex, Good Governace Growth Markets, CNX Nifty 50 |
| 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 Housing Development Finance Hold
| 360 METRICS | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 7 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| SENTIMENT | ||||||||
| SENTIMENT | 23 |
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| 360° VIEW | ||||||||
| 360° VIEW | 27 |
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ANALYSIS: With an Obermatt 360° View of 27 (better than 27% compared with alternatives), overall professional sentiment and financial characteristics for the stock Housing Development Finance are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Housing Development Finance. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 73% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 75 which means that the company has a financing structure that is safer than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 7 which means that the share price of Housing Development Finance is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 93% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 23, which means that professional investors are more pessimistic about the stock than for 77% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 27, Housing Development Finance is worse than 73% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 73), and the company is safely financed (Safety Rank of 75). However, professional market sentiment is low(Sentiment Rank of 23). The negative market view on Housing Development Finance may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Housing Development Finance compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Housing Development Finance negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock Housing Development Finance 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 Housing Development Finance. Analyst Opinions are at a rank of 95 (better than 95% 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 and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Housing Development Finance. But Market Pulse has a low rank of 10, 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 90% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 8, which means that, currently, professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), Housing Development Finance has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Housing Development Finance Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 7 (worse than 93% compared with alternatives), Housing Development Finance shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Housing Development Finance. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning Housing Development Finance's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 9, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Housing Development Finance. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 6 and Dividend Yield, which is lower than 70% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, is a sell recommendation based on Housing Development Finance's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Housing Development Finance? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Housing Development Finance? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Housing Development Finance may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Housing Development Finance Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Housing Development Finance shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Housing Development Finance. Sales Growth has a rank of 68 which means that currently, professionals expect the company to grow more than 68% of its competitors. Capital Growth is also above 45% of competitors with a rank of 57, and Stock Returns with the rank of 65 is also an outperformance. Only Profit Growth is low with a rank of 45 which means that currently, professionals expect the company to grow its profits less than 55% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Housing Development Finance is a good growth stock. ...read more
Safety Strategy: Housing Development Finance Debt Financing Safety very solid
| SAFETY METRICS | July 6, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 88 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 75 |
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ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2023, the company Housing Development Finance has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Housing Development Finance 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 Housing Development Finance. Refinancing is at 65, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. Liquidity is also good at 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 24, which means the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Housing Development Finance has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Housing Development Finance could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Housing Development Finance Above-Average Financial Performance
| COMBINED PERFORMANCE | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 7 |
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| GROWTH | ||||||||
| GROWTH | 73 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Housing Development Finance (Other Financial Services, India) shares have above-average financial characteristics compared with similar stocks. Shares of Housing Development Finance are low in value (priced high) with a consolidated Value Rank of 7 (worse than 93% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 75, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Housing Development Finance's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Housing Development Finance exhibits low value (Obermatt Value Rank of 7), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 75) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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