October 17, 2024
Top 10 Stock NIB 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: NIB – Top 10 Stock in Australian Securities Exchange Index ASX 200
NIB is listed as a top 10 stock on October 17, 2024 in the market index ASX 200 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 82 (top 82% performer), Obermatt assesses an overall strong buy recommendation for NIB on October 17, 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 NIB Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 87 |
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| 360° VIEW | ||||||||
| 360° VIEW | 82 |
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ANALYSIS: With an Obermatt 360° View of 82 (better than 82% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock NIB are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for NIB. The consolidated Value Rank has an attractive rank of 79, which means that the share price of NIB 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 79% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 87, which means that professional investors are more optimistic about the stock than for 87% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 23, 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 20, meaning the company has a riskier financing structure than 80 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 82, NIB is better positioned than 82% 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 79) and positive market sentiment in the professional investor community (Sentiment Rank of 87), but growth expectations are below-average (Growth Rank of 23) and the financing structure is on the risky side(Safety Rank of 20). 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 NIB 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 NIB very positive
ANALYSIS: With an Obermatt Sentiment Rank of 87 (better than 87% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock NIB is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for NIB. Analyst Opinions are at a rank of 59 (better than 59% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in NIB. The Professional Investors rank is 75, which means that currently, professional investors hold more stock in this company than in 75% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 82 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 82% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 87 (more positive than 87% compared with investment alternatives), NIB has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean NIB stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: NIB Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 79 (better than 79% compared with alternatives) for 2022, NIB shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for NIB. Price-to-Sales (P/S) is 85, which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value concerning NIB's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 69 (dividends are expected to be higher than 69% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 82% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for NIB to 18. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 79, is a buy recommendation based on NIB's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: NIB Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), NIB 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 half of the indicators below and half above average for NIB. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Capital Growth is also above 17% of competitors with a rank of 69. But Profit Growth only has a rank of 17, which means that currently professionals expect the company to grow its profits less than 83% of its competitors. And Stock Returns have also been below average with a rank of only 11. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: NIB Debt Financing Safety risky
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 54 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company NIB 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 NIB 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, where all three are above average for NIB. Leverage is at 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 54, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Finally, Liquidity is also good at a rank of 90, which means that the company generates more profit to service its debt than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), NIB has a financing structure that is significantly riskier than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: NIB Below-Average Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 36 |
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ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), NIB (Life & Health Insurance, Australia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of NIB are a good value (attractively priced) with a consolidated Value Rank of 79 (better than 79% of alternatives) but show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on NIB's financial characteristics. As the company NIB's key financial metrics exhibit good value (Obermatt Value Rank of 79) but low growth (Obermatt Growth Rank of 23) and risky financing practices (Obermatt Safety Rank of 20), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 79% 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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