June 20, 2024
Top 10 Stock National Australia Bank 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: National Australia Bank – Top 10 Stock in Australian Securities Exchange Index ASX 50
National Australia Bank is listed as a top 10 stock on June 20, 2024 in the market index ASX 50 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for National Australia Bank on June 20, 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 National Australia Bank Hold
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| SENTIMENT | ||||||||
| SENTIMENT | 40 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock National Australia Bank are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for National Australia Bank. The only rank that is above average is the consolidated Safety Rank at 82, which means that the company has a financing structure that is safer than those of 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 24, which means that the share price of National Australia Bank is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 37, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 40, which means that professional investors are more pessimistic about the stock than for 60% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, National Australia Bank is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 40. The negative market view on National Australia Bank may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. 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 National Australia Bank only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 40 (better than 40% compared with alternatives), overall professional sentiment and engagement for the stock National Australia Bank is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for National Australia Bank. Analyst Opinions are at a rank of 10 (worse than 90% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in National Australia Bank. Even better, the Professional Investors rank is 64, meaning that professional investors hold more stock in this company than in 64% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 63, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 63% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 40 (less encouraging than 60% compared with investment alternatives), National Australia Bank has a reputation among professional investors that is below that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: National Australia Bank Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 24 (worse than 76% compared with alternatives), National Australia Bank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for National Australia Bank. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 75% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 27 which means that the stock price compared with what market professionals expect for future profits is higher than 73% of comparable companies, indicating a low value concerning National Australia Bank's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 20 which means that the stock price compared with what market professionals expect for future profit levels is higher than 80% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 15 is also low. Compared with invested capital, the stock price is higher than for 85% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 24, is a sell recommendation based on National Australia Bank's stock price compared with the company's operational size and dividend yields. Should dividend investors pick National Australia Bank? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose National Australia Bank only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: National Australia Bank Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), National Australia Bank 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 all but one indicator above average for National Australia Bank. Sales Growth has a rank of 54 which means that currently, professionals expect the company to grow more than 54% of its competitors. Capital Growth is also above 11% of competitors with a rank of 57, and Stock Returns with the rank of 51 is also an outperformance. Only Profit Growth is low with a rank of 11 which means that currently, professionals expect the company to grow its profits less than 89% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, National Australia Bank is a good growth stock. ...read more
Safety Strategy: National Australia Bank Debt Financing Safety very solid
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 97 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
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ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company National Australia Bank has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of National Australia Bank 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 two out of three indicators above-average for National Australia Bank. Refinancing is at 97, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 97% of its competitors. Liquidity is also good at 56, meaning the company generates more profit to service its debt than 56% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 34, which means the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), National Australia Bank has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and National Australia Bank could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: National Australia Bank Below-Average Financial Performance
| COMBINED PERFORMANCE | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), National Australia Bank (Diversified Banks, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of National Australia Bank are low in value (priced high) with a consolidated Value Rank of 24 (worse than 76% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on National Australia Bank's financial characteristics. As the company National Australia Bank's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 24) and low growth (Obermatt Growth Rank of 37), 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 82) 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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