April 11, 2024
Top 10 Stock Nedbank Group 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: Nedbank Group – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Nedbank Group is listed as a top 10 stock on April 11, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Nedbank Group on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Diversified Banks |
| Index | Human Rights, Independent Boards Growth Markets, JSE All Shares |
| 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 Nedbank Group Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| SENTIMENT | ||||||||
| SENTIMENT | 89 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Nedbank Group are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Nedbank Group. The consolidated Value Rank has an attractive rank of 87, which means that the share price of Nedbank Group is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 87% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 52. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 89. But the consolidated Growth Rank has a low rank of 15, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 85 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 78, Nedbank Group is better positioned than 78% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 87), secure financing practices (Safety Rank of 52), and positive market sentiment in the professional investor community (Sentiment Rank of 89). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 15), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Nedbank Group is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Nedbank Group very positive
ANALYSIS: With an Obermatt Sentiment Rank of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Nedbank Group is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Nedbank Group. Analyst Opinions are at a rank of 68 (better than 68% 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 88, 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 Nedbank Group. Finally, the Professional Investors rank is 85, which means that currently, professional investors hold more stock in this company than in 85% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 89 (more positive than 89% compared with investment alternatives), Nedbank Group has a reputation among professional investors that is significantly higher than 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 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Nedbank Group 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: Nedbank Group Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Nedbank Group shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Nedbank Group. 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 Nedbank Group's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 80% 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 65. Compared with other companies in the same industry, dividend yields of Nedbank Group are expected to be higher than for 94% of all competitors (a Dividend Yield rank of 94). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Nedbank Group'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 Nedbank Group based on its detailed value metrics.
Growth Strategy: Nedbank Group Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Nedbank Group 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 Nedbank Group. Sales Growth has a rank of 27, which means that currently professionals expect the company to grow less than 73% of its competitors. The same is valid for Profit Growth, with a rank of 37, and Capital Growth with 9. In addition, Stock Returns have a below market rank of 41, which means that the stock returns have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, 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: Nedbank Group Debt Financing Safety above-average
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 49 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
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ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company Nedbank Group 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 Nedbank Group 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 Nedbank Group and the other two below average. Leverage is at a rank of 60 meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors.Refinancing is at a rank of 49, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 51% of its competitors. Liquidity is at a rank of 48, meaning that the company generates less profit to service its debt than 52% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), Nedbank Group has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Nedbank Group are on the safer side. ...read more
Combined financial peformance: Nedbank Group Above-Average Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| COMBINED | ||||||||
| COMBINED | 56 |
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ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Nedbank Group (Diversified Banks, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Nedbank Group are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives), are safely financed (Safety Rank of 52, which means low debt burdens), but show below-average growth (Growth Rank of 15). ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Nedbank Group's financial characteristics. As the company Nedbank Group's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 15) while being safely financed (Obermatt Safety Rank of 52), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 87% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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