November 28, 2024
Top 10 Stock Largan Precision 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: Largan Precision – Top 10 Stock in SDG 6: Clean Water and Sanitation
Largan Precision is listed as a top 10 stock on November 28, 2024 in the market index SDG 6 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 79 (top 79% performer), Obermatt assesses an overall strong buy recommendation for Largan Precision on November 28, 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 Largan Precision Strong Buy
| 360 METRICS | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 79 |
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| 360° VIEW | ||||||||
| 360° VIEW | 79 |
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ANALYSIS: With an Obermatt 360° View of 79 (better than 79% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Largan Precision are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Largan Precision. The consolidated Sentiment Rank has a good rank of 79, which means that professional investors are more optimistic about the stock than for 79% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 100 or better than 100% 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 27, meaning that the share price of Largan Precision 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 47. ...read more
RECOMMENDATION: With a consolidated 360° View of 79, Largan Precision is better positioned than 79% 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 79) and safe financing practices (Safety Rank of 100), 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 Largan Precisioṇ 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 Largan Precision very positive
ANALYSIS: With an Obermatt Sentiment Rank of 79 (better than 79% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Largan Precision is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Largan Precision. Analyst Opinions are at a rank of 50 (better than 50% 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 81, which means that currently, professional investors hold more stock in this company than in 81% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 66 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 66% of competitors). But Analyst Opinions Change has a below-average rank of 44, 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 Largan Precision. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 79 (more positive than 79% compared with investment alternatives), Largan Precision 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: Largan Precision Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Largan Precision shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Largan Precision. Price-to-Profit (also referred to as price-earnings, P/E) is 60 which means that the stock price compared with what market professionals expect for future profits is lower than for 60% of comparable companies, indicating a good value concerning Largan Precision's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 38, which means that the stock price is lower as regards to invested capital than for 38% of comparable investments. On the other hand, Price-to-Sales is less favorable than 95% of alternatives (only 5% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 29% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Largan Precision's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Largan Precision Growth Momentum low
| GROWTH METRICS | November 28, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 60 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 15 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 59 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
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ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Largan Precision 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 Largan Precision. Sales Growth has a rank of 60 which means that currently professionals expect the company to grow more than 60% of its competitors. Stock Returns are also above average with a rank of 59. But Capital Growth has only a rank of 15, which means that currently professionals expect the company to grow its invested capital less than 85% of its competitors. Profit Growth is also low, with a rank of only 48, 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 47, is a hold 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 59% 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: Largan Precision Debt Financing Safety very solid
| SAFETY METRICS | November 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Largan Precision has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Largan Precision 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 Largan Precision. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 59, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Largan Precision 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: Largan Precision Above-Average Financial Performance
| COMBINED PERFORMANCE | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 64 |
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ANALYSIS: With an Obermatt Combined Rank of 64 (better than 64% compared with investment alternatives), Largan Precision (Electronic Components, Taiwan) shares have above-average financial characteristics compared with similar stocks. Shares of Largan Precision are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives) and show below-average growth (Growth Rank of 47) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 64, is a buy recommendation based on Largan Precision's financial characteristics. As the company Largan Precision's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 27) and low growth (Obermatt Growth Rank of 47), 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 100) 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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