September 12, 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 FTSE 100 Index
Persimmon is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for Persimmon on September 12, 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 | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 52 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% 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 half of the metrics below and half above average for Persimmon. The consolidated Growth Rank has a good rank of 52, 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. This means that growth is higher than for 52% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 98 which means that the company has a financing structure that is safer than 98% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 27 which means that the share price of Persimmon is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 73% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 35, which means that professional investors are more pessimistic about the stock than for 65% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, Persimmon is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 52), and the company is safely financed (Safety Rank of 98). However, professional market sentiment is low(Sentiment Rank of 35). The negative market view on Persimmon may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Persimmon compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Persimmon only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% 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 three out of four metrics below average for Persimmon. Analyst Opinions are at a rank of 43 (worse than 57% 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 72, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Persimmon. But the Professional Investors rank is low at 48, which means that professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 19, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), Persimmon has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Persimmon Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Persimmon shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Persimmon. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 62% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning Persimmon's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 31 which means that the stock price compared with what market professionals expect for future profit levels is higher than 69% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43 is also low. Compared with invested capital, the stock price is higher than for 57% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Persimmon's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Persimmon? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Persimmon only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Persimmon Growth Momentum good
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 77 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 41 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 10 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 91 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 52 |
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ANALYSIS: With an Obermatt Growth Rank of 52 (better than 52% compared with alternatives), Persimmon shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Persimmon. Sales Growth has a rank of 77 which means that currently professionals expect the company to grow more than 77% of its competitors. Stock Returns are also above average with a rank of 91. But Capital Growth has only a rank of 10, which means that currently professionals expect the company to grow its invested capital less than 90% of its competitors. Profit Growth is also low, with a rank of only 41, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 52, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 91% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Persimmon Debt Financing Safety very solid
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 76 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% 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 76, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 76% 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 98 (better than 98% 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 | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 52 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% 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 27 (worse than 73% of alternatives). But they show above-average growth (Growth Rank of 52) and are safely financed (Safety Rank of 98, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Persimmon's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Persimmon exhibits low value (Obermatt Value Rank of 27), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 52). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 98) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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