October 17, 2024
Top 10 Stock iA Financial 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: iA Financial – Top 10 Stock in SDG 3: Good Health and Well-being
iA Financial is listed as a top 10 stock on October 17, 2024 in the market index SDG 3 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for iA Financial on October 17, 2024.
Snapshot: Obermatt Ranks
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 iA Financial Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| SENTIMENT | ||||||||
| SENTIMENT | 91 |
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| 360° VIEW | ||||||||
| 360° VIEW | 80 |
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ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock iA Financial are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for iA Financial. The consolidated Sentiment Rank has a good rank of 91, which means that professional investors are more optimistic about the stock than for 91% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 84 or better than 84% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 35, meaning that the share price of iA Financial is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 27. ...read more
RECOMMENDATION: With a consolidated 360° View of 80, iA Financial is better positioned than 80% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 91) and safe financing practices (Safety Rank of 84), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of iA Financiaḷ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for iA Financial very positive
ANALYSIS: With an Obermatt Sentiment Rank of 91 (better than 91% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock iA Financial is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for iA Financial. Analyst Opinions are at a rank of 83 (better than 83% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 77, which means that currently, professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 86 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 86% of competitors). But Analyst Opinions Change has a below-average rank of 35, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in iA Financial. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 91 (more positive than 91% compared with investment alternatives), iA Financial has a reputation among professional investors that is significantly higher than that of its competitors. This is an early 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 might just materialize in the future. ...read more
Value Strategy: iA Financial Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), iA Financial shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for iA Financial. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 67 which means that the stock price compared with what market professionals expect for future profits is lower than for 67% of comparable companies, indicating a good value concerning iA Financial's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 55, and for Dividend Yield with a Dividend Yield Rank of 75. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 99% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 1). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on iA Financial's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that iA Financial has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing iA Financial shares. ...read more
Growth Strategy: iA Financial Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), iA Financial 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 iA Financial. Profit Growth has a rank of 54, which means that currently professionals expect the company to grow its profits more than 54% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has a below the median rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Capital Growth also has a lower rank of 25. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, 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 iA Financial. ...read more
Safety Strategy: iA Financial Debt Financing Safety very solid
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 82 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 84 |
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ANALYSIS: With an Obermatt Safety Rank of 84 (better than 84% compared with alternatives) for 2022, the company iA Financial has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of iA Financial 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 iA Financial. Leverage is at 82, meaning the company has a below-average debt-to-equity ratio. It has less debt than 82% of its competitors. Refinancing is at a rank of 64, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Finally, Liquidity is also good at a rank of 66, which means that the company generates more profit to service its debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 84 (better than 84% compared with alternatives), iA Financial 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: iA Financial Top Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), iA Financial (Life & Health Insurance, Canada) shares have much better financial characteristics than comparable stocks. Shares of iA Financial are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives) and show below-average growth (Growth Rank of 27) but are safely financed (Safety Rank of 84), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong buy recommendation based on iA Financial's financial characteristics. As the company iA Financial's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 35) and low growth (Obermatt Growth Rank of 27), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 84) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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