July 6, 2023
Top 10 Stock NTPC 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: NTPC – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
NTPC is listed as a top 10 stock on July 06, 2023 in the market index CNX Nifty 50 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. Based on the Obermatt 360° View of 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for NTPC on July 06, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Power Producers & Traders |
| Index | BSE Sensex, Human Rights, CNX Nifty 50 |
| 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 NTPC Strong Buy
| 360 METRICS | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 69 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 82 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 13 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 93 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 76 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock NTPC are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for NTPC. The consolidated Value Rank has an attractive rank of 69, which means that the share price of NTPC 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 69% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 82, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 93. But the company’s financing is risky with a Safety rank of 13. This means 87% of comparable companies have a safer financing structure than NTPC. ...read more
RECOMMENDATION: With a consolidated 360° View of 76, NTPC is better positioned than 76% 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 69), above-average growth (Growth Rank of 82), and positive market sentiment in the professional investor community (Sentiment Rank of 93), 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 company financing structure is on the riskier side (Safety Rank of 13), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of NTPC is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for NTPC very positive
ANALYSIS: With an Obermatt Sentiment Rank of 93 (better than 93% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock NTPC is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for NTPC. Analyst Opinions are at a rank of 95 (better than 95% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 74, which means that currently, professional investors hold more stock in this company than in 74% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 67 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 67% of competitors). But Analyst Opinions Change has a below-average rank of 42, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in NTPC. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 93 (more positive than 93% compared with investment alternatives), NTPC has a reputation among professional investors that is significantly higher than that of its competitors. This is an early 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 might just materialize in the future. ...read more
Value Strategy: NTPC Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), NTPC shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for NTPC. Price-to-Sales is 67 which means that the stock price compared with what market professionals expect for future sales is lower than for 67% of comparable companies, indicating a good value for NTPC's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 76% 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 59. Compared with other companies in the same industry, dividend yields of NTPC are expected to be higher than for 55% of all competitors (a Dividend Yield rank of 55). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on NTPC'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 NTPC based on its detailed value metrics.
Growth Strategy: NTPC Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 82 (better than 82% compared with alternatives) for 2023, NTPC 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 NTPC. Sales Growth has a rank of 83 which means that currently, professionals expect the company to grow more than 83% of its competitors. Both Profit Growth, with a rank of 51, and Stock Returns, with a rank of 79, are also above average. But Capital Growth only has a rank of 35, which means that, currently, professionals expect the company to grow its invested capital less than 65% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 82, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: NTPC Debt Financing Safety risky
| SAFETY METRICS | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 29 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 10 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 42 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 13 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 13 (better than 13% compared with alternatives), the company NTPC 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 NTPC 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 NTPC. Liquidity is at 42, meaning that the company generates less profit to service its debt than 58% 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 29, meaning the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. Finally, Refinancing is at a rank of 10 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 13 (worse than 87% compared with alternatives), NTPC 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: NTPC Above-Average Financial Performance
| COMBINED PERFORMANCE | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 69 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 82 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 42 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 53 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 53 (better than 53% compared with investment alternatives), NTPC (Power Producers & Traders, India) shares have above-average financial characteristics compared with similar stocks. Shares of NTPC are a good value (attractively priced) with a consolidated Value Rank of 69 (better than 69% of alternatives), show above-average growth (Growth Rank of 82) but are riskily financed (Safety Rank of 13), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 53, is a buy recommendation based on NTPC's financial characteristics. As the company NTPC's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 69) and above-average growth (Obermatt Growth Rank of 82), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 13) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. 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.