March 14, 2024
Top 10 Stock Persimmon Hold 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: Persimmon – Top 10 Stock in Customer Satisfaction Leaders in Europe
Persimmon is listed as a top 10 stock on March 14, 2024 in the market index Customer Focus EU 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 48 (48% performer), Obermatt assesses an overall hold recommendation for Persimmon on March 14, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Homebuilding |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Customer Focus EU, Employee Focus EU, Timber Industry |
| 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 Persimmon Hold
| 360 METRICS | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 43 |
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| 360° VIEW | ||||||||
| 360° VIEW | 48 |
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ANALYSIS: With an Obermatt 360° View of 48 (better than 48% compared with alternatives), overall professional sentiment and financial characteristics for the stock Persimmon are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Persimmon. The only rank that is above average is the consolidated Safety Rank at 100, which means that the company has a financing structure that is safer than those of 100% 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 31, which means that the share price of Persimmon 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 19, 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 43, which means that professional investors are more pessimistic about the stock than for 57% 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 48, Persimmon is worse than 52% of all alternative stock investment opportunities based on the Obermatt Method. 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 43. The negative market view on Persimmon 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 Persimmon only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock Persimmon is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Persimmon. Analyst Opinions are at a rank of 34 (worse than 66% 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 61, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Persimmon. More encouragingly, the Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 19, 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 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), Persimmon has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Persimmon. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Persimmon Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Persimmon shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Persimmon. Expected dividend yields are higher than for 76% of comparable companies (a Dividend Yield rank of 76), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 20 which means that the stock price compared with what market professionals expect for future profits is higher than for 80% of comparable companies, indicating a low value concerning Persimmon's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Persimmon with a rank of 32. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 68% of comparable companies, indicating a low value concerning Persimmon's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Persimmon's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Persimmon may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Persimmon Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Persimmon shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Persimmon. Sales Growth has a below market rank of 46, which means that, currently, professionals expect the company to grow less than 54% of its competitors. The same is valid for Capital Growth, with a rank of 34, and Profit Growth, with a rank of 8. Currently, professionals expect the company to grow its profits less than 92% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Persimmon, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Persimmon Debt Financing Safety very solid
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 70 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Persimmon has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Persimmon 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 Persimmon. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 70, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Persimmon 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: Persimmon Above-Average Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 61 |
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ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Persimmon (Homebuilding, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Persimmon are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Persimmon's financial characteristics. As the company Persimmon's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 31) and low growth (Obermatt Growth Rank of 19), 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 100) 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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