August 22, 2024
Top 10 Stock Mitsubishi Chemical Hold 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: Mitsubishi Chemical – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Mitsubishi Chemical is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 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 38 (38% performer), Obermatt assesses an overall hold recommendation for Mitsubishi Chemical on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Diversified Chemicals |
| Index | TOPIX 100, Nikkei 225 |
| Size class | XX-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 Mitsubishi Chemical Hold
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 23 |
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| SENTIMENT | ||||||||
| SENTIMENT | 55 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% compared with alternatives), overall professional sentiment and financial characteristics for the stock Mitsubishi Chemical are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Mitsubishi Chemical. The consolidated Value Rank has an attractive rank of 90, which means that the share price of Mitsubishi Chemical 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 90% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 55, which means that professional investors are more optimistic about the stock than for 55% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 9, 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 23, meaning the company has a riskier financing structure than 77 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 38, Mitsubishi Chemical is worse than 62% of all alternative stock investment opportunities based on the Obermatt Method. 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 90) and positive market sentiment in the professional investor community (Sentiment Rank of 55), but growth expectations are below-average (Growth Rank of 9) and the financing structure is on the risky side(Safety Rank of 23). 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 Mitsubishi Chemical 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 Mitsubishi Chemical positive
ANALYSIS: With an Obermatt Sentiment Rank of 55 (better than 55% compared with alternatives), overall professional sentiment and engagement for the stock Mitsubishi Chemical is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Mitsubishi Chemical. Analyst Opinions are at a rank of 64 (better than 64% 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 62, 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 Mitsubishi Chemical. Finally, the Professional Investors rank is 58, which means that currently, professional investors hold more stock in this company than in 58% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 55 (more positive than 55% compared with investment alternatives), Mitsubishi Chemical 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 19, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 81% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Mitsubishi Chemical 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: Mitsubishi Chemical Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 90 (better than 90% compared with alternatives) for 2024, Mitsubishi Chemical shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Mitsubishi Chemical. Price-to-Sales is 86 which means that the stock price compared with what market professionals expect for future sales is lower than for 86% of comparable companies, indicating a good value for Mitsubishi Chemical's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 74% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 72. Compared with other companies in the same industry, dividend yields of Mitsubishi Chemical are expected to be higher than for 76% of all competitors (a Dividend Yield rank of 76). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, is a buy recommendation based on Mitsubishi Chemical's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Mitsubishi Chemical based on its detailed value metrics.
Growth Strategy: Mitsubishi Chemical Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Mitsubishi Chemical 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 three out of four indicators below average for Mitsubishi Chemical. Sales Growth has a below market rank of 11, which means that, currently, professionals expect the company to grow less than 89% of its competitors. The same is valid for Capital Growth, with a rank of 45, and Profit Growth, with a rank of 13. Currently, professionals expect the company to grow its profits less than 87% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 59, which means that the stock returns have recently been above 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 9, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Mitsubishi Chemical, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Mitsubishi Chemical Debt Financing Safety risky
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 51 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 23 |
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ANALYSIS: With an Obermatt Safety Rank of 23 (better than 23% compared with alternatives), the company Mitsubishi Chemical 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 Mitsubishi Chemical 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 Mitsubishi Chemical and the other two below average. Refinancing is at 51, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. But Leverage is high with a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Liquidity is also on the riskier side with a rank of 39, meaning the company generates less profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 23 (worse than 77% compared with alternatives), Mitsubishi Chemical 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 Mitsubishi Chemical 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: Mitsubishi Chemical Below-Average Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 90 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 38 |
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ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), Mitsubishi Chemical (Diversified Chemicals, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Mitsubishi Chemical are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives) but show below-average growth (Growth Rank of 9), and are riskily financed (Safety Rank of 23), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on Mitsubishi Chemical's financial characteristics. As the company Mitsubishi Chemical's key financial metrics exhibit good value (Obermatt Value Rank of 90) but low growth (Obermatt Growth Rank of 9) and risky financing practices (Obermatt Safety Rank of 23), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 90% 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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