June 22, 2023
Top 10 Stock London Stock Exchange 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: London Stock Exchange – Top 10 Stock in FTSE 100 Index
London Stock Exchange is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 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 51 (high 51% performer), Obermatt assesses an overall buy recommendation for London Stock Exchange on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Financial Exchanges & Data |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Employee Focus EU, Human Rights, Renewables Users |
| Size class | X-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 London Stock Exchange Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| SENTIMENT | ||||||||
| SENTIMENT | 87 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock London Stock Exchange are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for London Stock Exchange. The consolidated Growth Rank has a good rank of 53, 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 53% of competitors in the same industry. The consolidated Safety Rank at 63 means that the company has a financing structure that is safer than 63% 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 87, which means that professional investors are more optimistic about the stock than for 87% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 3, meaning that the share price of London Stock Exchange is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 97% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a 360° View of 51, London Stock Exchange is better positioned than 51% 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 53), a safe financing structure (Safety Rank of 63), and positive professional market sentiment (Sentiment Rank of 87), 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 London Stock Exchange compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (53% better than peers). The value rank could be the reverse reflection of that (47%). 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 London Stock Exchange very positive
ANALYSIS: With an Obermatt Sentiment Rank of 87 (better than 87% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock London Stock Exchange is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for London Stock Exchange. Analyst Opinions are at a rank of 75 (better than 75% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 59, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 83, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 83% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 49, which means that currently, professional investors hold less stock in this company than in 51% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 87 (more positive than 87% compared with investment alternatives), London Stock Exchange has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in London Stock Exchange may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in London Stock Exchange. ...read more
Value Strategy: London Stock Exchange Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), London Stock Exchange 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 London Stock Exchange. Price-to-Sales is 14 which means that the stock price compared with what market professionals expect for future profits is higher than 86% of comparable companies, indicating a low value concerning London Stock Exchange's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 30, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of London Stock Exchange. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 3 and Dividend Yield, which is lower than 90% 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 3, is a SELL recommendation based on London Stock Exchange's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for London Stock Exchange? 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 London Stock Exchange? 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. London Stock Exchange 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: London Stock Exchange Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), London Stock Exchange 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 London Stock Exchange. Profit Growth has a rank of 59, which means that currently professionals expect the company to grow its profits more than 59% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has a below the median rank of 46, which means that, currently, professionals expect the company to grow less than 54% of its competitors, and Capital Growth also has a lower rank of 11. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a BUY 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 London Stock Exchange. ...read more
Safety Strategy: London Stock Exchange Debt Financing Safety above-average
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 87 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
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ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company London Stock Exchange has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of London Stock Exchange 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 just one indicator above average for London Stock Exchange and the other two below average. Refinancing is at 87, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 87% of its competitors. But Leverage is high with a rank of 42, meaning the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. Liquidity is also on the riskier side with a rank of 38, meaning the company generates less profit to service its debt than 62% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), London Stock Exchange has a financing structure that is safer 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 London Stock Exchange 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: London Stock Exchange Lowest Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 53 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 10 |
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ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), London Stock Exchange (Financial Exchanges & Data, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of London Stock Exchange are low in value (priced high) with a consolidated Obermatt Value Rank of 3 (worse than 97% of alternatives). But they show above-average growth (Growth Rank of 53) and are safely financed (Safety Rank of 63, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 10, is a sell recommendation based on London Stock Exchange's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company London Stock Exchange exhibits low value (Obermatt Value Rank of 3), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 53). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 63) 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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