October 17, 2024
Top 10 Stock Interfor 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: Interfor – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Interfor 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. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for Interfor on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Forest Products |
| Index | Low Waste, SDG 12, SDG 13, SDG 15, SDG 8, SDG 9, Timber Industry, TSX Composite |
| Size class | 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 Interfor Buy
| 360 METRICS | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 71 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 95 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 24 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 27 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 70 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock Interfor are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Interfor. The consolidated Value Rank has an attractive rank of 71, which means that the share price of Interfor is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 71% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 95, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 27. Professional investors are more confident in 73% other stocks. Worryingly, the company has risky financing, with a Safety rank of 24. This means 76% of comparable companies have a safer financing structure than Interfor. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, Interfor is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 71 and the Growth Rank above-average at 95, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 27. In addition, the company financing structure is on the riskier side (Safety Rank of 24). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Interfor only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock Interfor is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Interfor. Analyst Opinions are at a rank of 63 (better than 63% 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 Interfor. 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 30, which means that, currently, professional investors hold less stock in this company than in 70% 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 27 (less encouraging than 73% compared with investment alternatives), Interfor has a reputation among professional investors that is 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: Interfor Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Interfor shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Interfor. Price-to-Sales (P/S) is 90, which means that the stock price compared with what market professionals expect for future sales is lower than for 90% of comparable companies, indicating a good value concerning Interfor's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 90% of alternatives (10% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 1, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on Interfor's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Interfor may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Interfor Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Interfor shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Interfor. Sales Growth has a rank of 96 which means that currently, professionals expect the company to grow more than 96% of its competitors. Capital Growth is also above 45% of competitors with a rank of 88. But Profit Growth only has a rank of 45, which means that currently professionals expect the company to grow its profits less than 55% of its competitors. And Stock Returns have also been below average with a rank of only 45. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Interfor Debt Financing Safety risky
| SAFETY METRICS | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 38 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 77 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 24 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 24 (better than 24% compared with alternatives), the company Interfor has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Interfor 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 Interfor and the other two below average. Refinancing is at 77, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 77% of its competitors. But Leverage is high with a rank of 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Liquidity is also on the riskier side with a rank of 6, meaning the company generates less profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 24 (worse than 76% compared with alternatives), Interfor has a financing structure that is significantly 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 Interfor 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: Interfor Top Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 71 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 95 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 6 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 82 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Interfor (Forest Products, Canada) shares have much better financial characteristics than comparable stocks. Shares of Interfor are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives), show above-average growth (Growth Rank of 95) but are riskily financed (Safety Rank of 24), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Interfor's financial characteristics. As the company Interfor's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 71) and above-average growth (Obermatt Growth Rank of 95), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 24) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.