July 25, 2024
Top 10 Stock Reliance 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: Reliance – Top 10 Stock in Bombay Stock Exchange Sensitive Index BSE Sensex
Reliance is listed as a top 10 stock on July 25, 2024 in the market index BSE Sensex because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 56 (high 56% performer), Obermatt assesses an overall buy recommendation for Reliance on July 25, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Oil & Gas Refining |
| Index | BSE Sensex, Energy Efficient, Good Governace Growth Markets, Human Rights, Low Waste, 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 Reliance Buy
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 13 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 56 |
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ANALYSIS: With an Obermatt 360° View of 56 (better than 56% compared with alternatives), overall professional sentiment and financial characteristics for the stock Reliance are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Reliance. The consolidated Growth Rank has a good rank of 59, 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 59% of competitors in the same industry. The consolidated Safety Rank at 75 means that the company has a financing structure that is safer than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 13, meaning that the share price of Reliance is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 87% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 56, Reliance is better positioned than 56% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 59), a safe financing structure (Safety Rank of 75), and positive professional market sentiment (Sentiment Rank of 65), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. 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 Reliance compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (59% better than peers). The value rank could be the reverse reflection of that (41%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Reliance positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Reliance is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Reliance. Analyst Opinions are at a rank of 71 (better than 71% 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 57, which means that currently, professional investors hold more stock in this company than in 57% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 74 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 74% of competitors). But Analyst Opinions Change has a below-average rank of 10, 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 Reliance. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Reliance has a reputation among professional investors that is above-average compared with 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: Reliance Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 13 (worse than 87% compared with alternatives), Reliance shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Reliance. Price-to-Sales is 31 which means that the stock price compared with what market professionals expect for future profits is higher than 69% of comparable companies, indicating a low value concerning Reliance's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 33, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Reliance. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 80% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 13, is a sell recommendation based on Reliance's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Reliance? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Reliance? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Reliance may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Reliance Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Reliance 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 all but one indicator above average for Reliance. Sales Growth has a rank of 69 which means that currently, professionals expect the company to grow more than 69% of its competitors. Capital Growth is also above 36% of competitors with a rank of 56, and Stock Returns with the rank of 61 is also an outperformance. Only Profit Growth is low with a rank of 36 which means that currently, professionals expect the company to grow its profits less than 64% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Reliance is a good growth stock. ...read more
Safety Strategy: Reliance Debt Financing Safety very solid
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 82 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 75 |
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ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2024, the company Reliance has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Reliance 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 Reliance. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 37, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Reliance has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Reliance. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Reliance Above-Average Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 13 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| COMBINED | ||||||||
| COMBINED | 52 |
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ANALYSIS: With an Obermatt Combined Rank of 52 (better than 52% compared with investment alternatives), Reliance (Oil & Gas Refining, India) shares have above-average financial characteristics compared with similar stocks. Shares of Reliance are low in value (priced high) with a consolidated Value Rank of 13 (worse than 87% of alternatives). But they show above-average growth (Growth Rank of 59) and are safely financed (Safety Rank of 75, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 52, is a buy recommendation based on Reliance's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Reliance exhibits low value (Obermatt Value Rank of 13), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 59). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 75) 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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