July 25, 2024
Top 10 Stock PacWest Sell 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: PacWest – Top 10 Stock in Dow Jones U.S. Regional Banks Index
PacWest is listed as a top 10 stock on July 25, 2024 in the market index D.J. US Banks because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 8 (8% performer), Obermatt issues an overall sell recommendation for PacWest on July 25, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Regional Banks |
| Index | Dividends USA, NASDAQ, D.J. US Banks, S&P MIDCAP |
| 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 PacWest Sell
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 8 |
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ANALYSIS: With an Obermatt 360° View of 8 (better than 8% compared with alternatives), overall professional sentiment and financial characteristics for the stock PacWest are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for PacWest. The only rank that is above average is the consolidated Safety Rank at 77, which means that the company has a financing structure that is safer than those of 77% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 43, which means that the share price of PacWest is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 29, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 1, which means that professional investors are more pessimistic about the stock than for 99% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 8, PacWest is worse than 92% of all alternative stock investment opportunities based on the Obermatt Method. This means that PacWest shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 1. The negative market view on PacWest may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for PacWest negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock PacWest is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for PacWest. Analyst Opinions are at a rank of 36 (worse than 64% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 24 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 1, 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 99% of competitors). No wonder, the Professional Investors rank is only 1, which means that professional investors hold less stock in this company than in 99% of alternative investment opportunities. Pros tend to stay away from PacWest, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), PacWest has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: PacWest Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), PacWest shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for PacWest. Price-to-Sales (P/S) is 97 which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value for PacWest's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 97. Finally, compared with other companies in the same industry, dividend yields of PacWest are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). The only low rank is for expected profits with a Price-to-Profit Rank of 1, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on PacWest's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: PacWest Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), PacWest 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 PacWest. Sales Growth has a rank of 81 which means that currently, professionals expect the company to grow more than 81% of its competitors. Capital Growth is also above 39% of competitors with a rank of 51. But Profit Growth only has a rank of 39, which means that currently professionals expect the company to grow its profits less than 61% of its competitors. And Stock Returns have also been below average with a rank of only 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold 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: PacWest Debt Financing Safety very solid
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 88 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 77 |
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ANALYSIS: With an Obermatt Safety Rank of 77 (better than 77% compared with alternatives) for 2023, the company PacWest has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of PacWest 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 PacWest. Refinancing is at 88, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 88% of its competitors. Liquidity is also good at 94, meaning the company generates more profit to service its debt than 94% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 1, which means the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 77 (better than 77% compared with alternatives), PacWest has a financing structure that is significantly 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 PacWest 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: PacWest Lowest Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| COMBINED | ||||||||
| COMBINED | 24 |
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ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), PacWest (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of PacWest are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 29) but are safely financed (Safety Rank of 77), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on PacWest's financial characteristics. As the company PacWest's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 77) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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