December 19, 2024
Top 10 Stock McMillan Shakespeare Sell 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: McMillan Shakespeare – Top 10 Stock in Australian Securities Exchange Index ASX 300
McMillan Shakespeare is listed as a top 10 stock on December 19, 2024 in the market index ASX 300 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 22 (22% performer), Obermatt issues an overall sell recommendation for McMillan Shakespeare on December 19, 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 McMillan Shakespeare Sell
| 360 METRICS | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 56 |
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| 360° VIEW | ||||||||
| 360° VIEW | 22 |
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ANALYSIS: With an Obermatt 360° View of 22 (better than 22% compared with alternatives), overall professional sentiment and financial characteristics for the stock McMillan Shakespeare are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for McMillan Shakespeare. The consolidated Value Rank has an attractive rank of 53, which means that the share price of McMillan Shakespeare is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 53% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 56, which means that professional investors are more optimistic about the stock than for 56% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 3, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 31, meaning the company has a riskier financing structure than 69 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 22, McMillan Shakespeare is worse than 78% of all alternative stock investment opportunities based on the Obermatt Method. This means that McMillan Shakespeare shares are on the riskier side for investors. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 53) and positive market sentiment in the professional investor community (Sentiment Rank of 56), but growth expectations are below-average (Growth Rank of 3) and the financing structure is on the risky side(Safety Rank of 31). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of McMillan Shakespeare is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for McMillan Shakespeare positive
ANALYSIS: With an Obermatt Sentiment Rank of 56 (better than 56% compared with alternatives), overall professional sentiment and engagement for the stock McMillan Shakespeare is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for McMillan Shakespeare. Analyst Opinions are at a rank of 76 (better than 76% 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 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in McMillan Shakespeare. Finally, the Professional Investors rank is 65, which means that currently, professional investors hold more stock in this company than in 65% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 56 (more positive than 56% compared with investment alternatives), McMillan Shakespeare has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 24, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 76% of competitors). This could mean future risks and should make investors careful. Attention to negative news for McMillan Shakespeare is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: McMillan Shakespeare Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), McMillan Shakespeare shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for McMillan Shakespeare. Price-to-Profit (also referred to as price-earnings, P/E) is 93 which means that the stock price compared with what market professionals expect for future profits is lower than for 93% of comparable companies, indicating a good value concerning McMillan Shakespeare'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 7, which means that the stock price is lower as regards to invested capital than for 7% of comparable investments. On the other hand, Price-to-Sales is less favorable than 62% of alternatives (only 38% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 0% 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 53, is a buy recommendation based on McMillan Shakespeare'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: McMillan Shakespeare Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), McMillan Shakespeare shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for McMillan Shakespeare. Sales Growth has a rank of 26, which means that currently professionals expect the company to grow less than 74% of its competitors. The same is valid for Profit Growth, with a rank of 19, and Capital Growth with 1. In addition, Stock Returns have a below market rank of 35, which means that the stock returns have recently been below 65% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: McMillan Shakespeare Debt Financing Safety below-average
| SAFETY METRICS | December 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 58 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company McMillan Shakespeare has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of McMillan Shakespeare 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 McMillan Shakespeare and the other two below average. Refinancing is at 58, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. But Leverage is high with a rank of 1, meaning the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. Liquidity is also on the riskier side with a rank of 27, meaning the company generates less profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), McMillan Shakespeare has a financing structure that is 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 McMillan Shakespeare 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: McMillan Shakespeare Lowest Financial Performance
| COMBINED PERFORMANCE | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 8 |
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ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), McMillan Shakespeare (HR- & Employment Services, Australia) shares have lower financial characteristics compared with similar stocks. Shares of McMillan Shakespeare are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives) but show below-average growth (Growth Rank of 3), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on McMillan Shakespeare's financial characteristics. As the company McMillan Shakespeare's key financial metrics exhibit good value (Obermatt Value Rank of 53) but low growth (Obermatt Growth Rank of 3) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 53% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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