October 17, 2024
Top 10 Stock Imperial 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: Imperial – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Imperial is listed as a top 10 stock on October 17, 2024 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Imperial on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Oil & Gas Integrated |
| Index | Low Emissions, Human Rights, Water Efficiency, TSX Composite |
| 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 Imperial Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 97 |
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| SENTIMENT | ||||||||
| SENTIMENT | 77 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Imperial are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Imperial. The consolidated Growth Rank has a good rank of 61, 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 61% of competitors in the same industry. The consolidated Safety Rank at 97 means that the company has a financing structure that is safer than 97% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 77, which means that professional investors are more optimistic about the stock than for 77% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 27, meaning that the share price of Imperial is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 73% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, Imperial is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 61), a safe financing structure (Safety Rank of 97), and positive professional market sentiment (Sentiment Rank of 77), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. 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 Imperial compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (61% better than peers). The value rank could be the reverse reflection of that (39%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Imperial very positive
ANALYSIS: With an Obermatt Sentiment Rank of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Imperial is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Imperial. Analyst Opinions are at a rank of 15 (worse than 85% 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 7, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 89, which means that professional investors hold more stock in this company than in 89% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 94, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 94% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Imperial and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 77 (more positive than 77% compared with investment alternatives), Imperial has a reputation among professional investors that is significantly higher than 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: Imperial Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Imperial shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Imperial. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning Imperial's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 31, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Imperial. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 48 and Dividend Yield, which is lower than 69% 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 27, is a hold recommendation based on Imperial's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Imperial? 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 Imperial? 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. Imperial 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: Imperial Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Imperial 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 half of the indicators below and half above average for Imperial. Sales Growth has a rank of 54 which means that currently professionals expect the company to grow more than 54% of its competitors. Stock Returns are also above average with a rank of 87. But Capital Growth has only a rank of 27, which means that currently professionals expect the company to grow its invested capital less than 73% of its competitors. Profit Growth is also low, with a rank of only 43, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 87% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Imperial Debt Financing Safety very solid
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 88 |
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| REFINANCING | ||||||||
| REFINANCING | 71 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 97 |
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ANALYSIS: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives) for 2024, the company Imperial has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Imperial 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, where all three are above average for Imperial. Leverage is at 88, meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors. Refinancing is at a rank of 71, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 97 (better than 97% compared with alternatives), Imperial has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Imperial Above-Average Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 73 |
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ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), Imperial (Oil & Gas Integrated, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Imperial are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives). But they show above-average growth (Growth Rank of 61) and are safely financed (Safety Rank of 97, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on Imperial's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Imperial exhibits low value (Obermatt Value Rank of 27), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 61). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 97) 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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