June 20, 2024
Top 10 Stock Newcrest 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: Newcrest – Top 10 Stock in Australian Securities Exchange Index ASX 50
Newcrest 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. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for Newcrest 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 Newcrest Hold
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 39 |
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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 Newcrest are below the industry average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for Newcrest. The consolidated Value Rank has a low rank of 36 which means that the share price of Newcrest is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 64% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 49, which means 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. This means that growth is lower than for 49% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 34, which means that the company has a riskier financing structure than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 39, which means that professional investors are more pessimistic about the stock than for 61% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, Newcrest is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 39. The negative market view on Newcrest may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments 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 confirmed by investor behavior today. While Newcrest may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for Newcrest only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 39 (better than 39% compared with alternatives), overall professional sentiment and engagement for the stock Newcrest is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Newcrest. Analyst Opinions are at a rank of 12 (worse than 88% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 14, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 74, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 74% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Newcrest and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 39 (less encouraging than 61% compared with investment alternatives), Newcrest has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Newcrest Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% compared with alternatives), Newcrest shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Newcrest. Expected dividend yields are higher than for 53% of comparable companies (a Dividend Yield rank of 53), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 19 which means that the stock price compared with what market professionals expect for future profits is higher than for 81% of comparable companies, indicating a low value concerning Newcrest's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Newcrest with a rank of 43. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 57% of comparable companies, indicating a low value concerning Newcrest's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a hold recommendation based on Newcrest's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Newcrest may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Newcrest Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Newcrest 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 half of the indicators below and half above average for Newcrest. Sales Growth has a rank of 73, which means that, currently, professionals expect the company to grow more than 73% of its competitors. Profit Growth with a rank of 69 is also above average. But Capital Growth has only a rank of 37, and Stock Returns with 28 are also below-average. Stock returns for Newcrest have recently been below 72% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Newcrest. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Newcrest Debt Financing Safety below-average
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 23 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Newcrest 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 Newcrest 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 two out of three indicators above average for Newcrest. Leverage is at a rank of 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors. Liquidity is also good at a rank of 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 23, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 77% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Newcrest has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Newcrest. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Newcrest Below-Average Financial Performance
| COMBINED PERFORMANCE | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 48 |
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ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Newcrest (Gold Production, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Newcrest are low in value (priced high) with a consolidated Value Rank of 36 (worse than 64% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Newcrest's financial characteristics. As the company Newcrest's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 36), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 34), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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