September 12, 2024
Top 10 Stock Nippon Light Metal 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: Nippon Light Metal – Top 10 Stock in Nikkei 225 Index
Nippon Light Metal is listed as a top 10 stock on September 12, 2024 in the market index Nikkei 225 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 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for Nippon Light Metal on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Aluminum |
| Index | Nikkei 225 |
| Size class | X-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 Nippon Light Metal Strong Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Nippon Light Metal are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Nippon Light Metal. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Nippon Light Metal 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 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 67. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 51. But the consolidated Growth Rank has a low rank of 49, 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. 51 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, Nippon Light Metal is better positioned than 89% 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 93), secure financing practices (Safety Rank of 67), and positive market sentiment in the professional investor community (Sentiment Rank of 51). 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 49), 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 Nippon Light Metal 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 Nippon Light Metal positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Nippon Light Metal is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Nippon Light Metal. Analyst Opinions are at a rank of 22 (worse than 78% 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 80 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Nippon Light Metal. Market Pulse is also positive with a rank of 78, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 78% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 24, which means that professional investors hold less stock in this company than in 76% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Nippon Light Metal has a reputation among professional investors that is above-average compared with that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Nippon Light Metal Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2024, Nippon Light Metal shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Nippon Light Metal. Price-to-Sales is 93 which means that the stock price compared with what market professionals expect for future sales is lower than for 93% of comparable companies, indicating a good value for Nippon Light Metal's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 78% 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 93. Compared with other companies in the same industry, dividend yields of Nippon Light Metal are expected to be higher than for 77% of all competitors (a Dividend Yield rank of 77). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on Nippon Light Metal'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 Nippon Light Metal based on its detailed value metrics.
Growth Strategy: Nippon Light Metal Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 16 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 64 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 62 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 49 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 49 |
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ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Nippon Light Metal 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, where half of the indicators are below and half above average for Nippon Light Metal. Profit Growth, with a rank of 64 (better than 64% of its competitors), and Capital Growth, with a rank of 62, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors, and Stock Returns are at a rank of 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Nippon Light Metal Debt Financing Safety above-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 85 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 67 |
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ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company Nippon Light Metal 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 Nippon Light Metal 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 Nippon Light Metal. Refinancing is at 85, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Liquidity is also good at 60, meaning the company generates more profit to service its debt than 60% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 30, which means the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), Nippon Light Metal has a financing structure that is 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 Nippon Light Metal 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: Nippon Light Metal Top Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Nippon Light Metal (Aluminum, Japan) shares have much better financial characteristics than comparable stocks. Shares of Nippon Light Metal are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 67, which means low debt burdens), but show below-average growth (Growth Rank of 49). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Nippon Light Metal's financial characteristics. As the company Nippon Light Metal's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 49) while being safely financed (Obermatt Safety Rank of 67), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 93% 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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