August 22, 2024
Top 10 Stock Nippon Steel 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 Steel – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Nippon Steel is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 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 from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for Nippon Steel on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Steel |
| Index | TOPIX 100, Low Emissions, Energy Efficient, Nikkei 225 |
| 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 Nippon Steel Strong Buy
| 360 METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 90 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 75 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 64 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 27 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 75 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Nippon Steel are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Nippon Steel. The consolidated Value Rank has an attractive rank of 90, which means that the share price of Nippon Steel is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 90% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 75, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 64. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 27. Professional investors are more confident in 73% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 75, Nippon Steel is better positioned than 75% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 90), above-average growth (Growth Rank of 75), and safe financing practices (Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 27), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Nippon Steel is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Nippon Steel only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock Nippon Steel is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Nippon Steel. Analyst Opinions are at a rank of 58 (better than 58% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 57 which means that currently, professional investors hold more stock in this company than in 57% of alternative investment opportunities. But Analyst Opinions Change has a rank of 28, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Nippon Steel. Furthermore, Market Pulse has a rank of 10, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 90% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 27 (less encouraging than 73% compared with investment alternatives), Nippon Steel has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Nippon Steel Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 90 (better than 90% compared with alternatives) for 2024, Nippon Steel 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 Steel. Price-to-Sales is 82 which means that the stock price compared with what market professionals expect for future sales is lower than for 82% of comparable companies, indicating a good value for Nippon Steel's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 92% 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 82. Compared with other companies in the same industry, dividend yields of Nippon Steel are expected to be higher than for 73% of all competitors (a Dividend Yield rank of 73). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 90, is a buy recommendation based on Nippon Steel'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 Steel based on its detailed value metrics.
Growth Strategy: Nippon Steel Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2024, Nippon Steel shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Nippon Steel. Sales Growth has a rank of 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Capital Growth is also above 26% of competitors with a rank of 84, and Stock Returns with the rank of 50 is also an outperformance. Only Profit Growth is low with a rank of 26 which means that currently, professionals expect the company to grow its profits less than 74% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Nippon Steel is a good growth stock. ...read more
Safety Strategy: Nippon Steel Debt Financing Safety above-average
| SAFETY METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 32 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 75 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Nippon Steel 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 Steel 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 Steel. Refinancing is at 75, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. Liquidity is also good at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 32, which means the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Nippon Steel 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 Steel 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 Steel Top Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 90 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 75 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 66 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 96 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Nippon Steel (Steel, Japan) shares have much better financial characteristics than comparable stocks. Shares of Nippon Steel are a good value (attractively priced) with a consolidated Value Rank of 90 (better than 90% of alternatives), show above-average growth (Growth Rank of 75), and are safely financed (Safety Rank of 64), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Nippon Steel's financial characteristics. As the company Nippon Steel's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 90), above-average growth (Obermatt Growth Rank of 75), and indicate that the company is safely financed (Obermatt Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Nippon Steel. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.