August 22, 2024
Top 10 Stock Otsuka 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: Otsuka – Top 10 Stock in SDG 15: Life on Land
Otsuka is listed as a top 10 stock on August 22, 2024 in the market index SDG 15 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 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Otsuka on August 22, 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 Otsuka Strong Buy
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Otsuka are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Otsuka. The consolidated Value Rank has an attractive rank of 73, which means that the share price of Otsuka 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 73% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 96. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 90. 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 100, Otsuka is better positioned than 100% 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 73), secure financing practices (Safety Rank of 96), and positive market sentiment in the professional investor community (Sentiment Rank of 90). 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 Otsuka 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 Otsuka very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Otsuka is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Otsuka. Analyst Opinions are at a rank of 74 (better than 74% 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 74, 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 Otsuka. The Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 64 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 64% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Otsuka 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 Otsuka 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: Otsuka Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), Otsuka shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Otsuka. Price-to-Sales (P/S) 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 concerning Otsuka's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 85, which means that dividends are expected to be higher than for 85% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 51% of alternatives (only 49% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on Otsuka's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Otsuka Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Otsuka 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 Otsuka. Capital Growth has a rank of 71, which means that currently professionals expect the company to grow its invested capital more than 23% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 61 (above 61% of alternative investments). But Sales Growth has only a rank of 49, which means that, currently, professionals expect the company to grow less than 51% of its competitors, and Profit Growth is also low at a rank of 23. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Otsuka, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Otsuka Debt Financing Safety very solid
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 79 |
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| REFINANCING | ||||||||
| REFINANCING | 75 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2024, the company Otsuka has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Otsuka 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, where all three are above average for Otsuka. Leverage is at 79, meaning the company has a below-average debt-to-equity ratio. It has less debt than 79% of its competitors. Refinancing is at a rank of 75, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. Finally, Liquidity is also good at a rank of 96, which means that the company generates more profit to service its debt than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Otsuka has a financing structure that is significantly safer 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: Otsuka Top Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), Otsuka (IT Consulting & oth. Services, Japan) shares have much better financial characteristics than comparable stocks. Shares of Otsuka are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), are safely financed (Safety Rank of 96, which means low debt burdens), but show below-average growth (Growth Rank of 49). ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on Otsuka's financial characteristics. As the company Otsuka's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 49) while being safely financed (Obermatt Safety Rank of 96), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 73% 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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