April 11, 2024
Top 10 Stock Netcare 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: Netcare – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Netcare 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. 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 36 (36% performer), Obermatt assesses an overall hold recommendation for Netcare on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Health Care Facilities |
| Index | Low Emissions, Energy Efficient, Independent Boards Growth Markets, Low Waste, JSE All Shares |
| Size class | 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 Netcare Hold
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 60 |
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| 360° VIEW | ||||||||
| 360° VIEW | 36 |
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ANALYSIS: With an Obermatt 360° View of 36 (better than 36% compared with alternatives), overall professional sentiment and financial characteristics for the stock Netcare 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 Netcare. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Netcare 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 94% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 60, which means that professional investors are more optimistic about the stock than for 60% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 20, 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 16, meaning the company has a riskier financing structure than 84 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 36, Netcare is worse than 64% 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 94) and positive market sentiment in the professional investor community (Sentiment Rank of 60), but growth expectations are below-average (Growth Rank of 20) and the financing structure is on the risky side(Safety Rank of 16). 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 Netcare 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 Netcare positive
ANALYSIS: With an Obermatt Sentiment Rank of 60 (better than 60% compared with alternatives), overall professional sentiment and engagement for the stock Netcare is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Netcare. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 57, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 57% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 39, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Netcare. There are also only so many institutional investors holding company stock with a Professional Investors rank of 39, which means that, currently, professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 60 (more positive than 60% compared with investment alternatives), Netcare has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Netcare Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2024, Netcare shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Netcare. Price-to-Sales is 95 which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value for Netcare's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 90% 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 69. Compared with other companies in the same industry, dividend yields of Netcare are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Netcare'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 Netcare based on its detailed value metrics.
Growth Strategy: Netcare Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Netcare 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 Netcare. Only Capital Growth has a good rank of 68, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 13 which means that currently professionals expect the company to grow less than 87% of its competitors. Profit Growth with a rank of 41 and Stock Returns with a rank of 15 are also low (below 85% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Netcare is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Netcare Debt Financing Safety risky
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 12 |
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| REFINANCING | ||||||||
| REFINANCING | 43 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
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ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company Netcare 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 Netcare 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 all three metrics below average for Netcare. Liquidity is at 38, meaning that the company generates less profit to service its debt than 62% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 12, meaning the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. Finally, Refinancing is at a rank of 43 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% compared with alternatives), Netcare has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Netcare Below-Average Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 26 |
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ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Netcare (Health Care Facilities, South Africa) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Netcare are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives) but show below-average growth (Growth Rank of 20), and are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Netcare's financial characteristics. As the company Netcare's key financial metrics exhibit good value (Obermatt Value Rank of 94) but low growth (Obermatt Growth Rank of 20) and risky financing practices (Obermatt Safety Rank of 16), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 94% 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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