September 5, 2024
Top 10 Stock Renishaw Buy Recommendation

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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 Renishaw Buy

360 METRICS	September 5, 2024
VALUE
VALUE	48
GROWTH
GROWTH	49
SAFETY
SAFETY	98
SENTIMENT
SENTIMENT	47
360° VIEW
360° VIEW	69

ANALYSIS: With an Obermatt 360° View of 69 (better than 69% compared with alternatives), overall professional sentiment and financial characteristics for the stock Renishaw are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Renishaw. The only rank that is above average is the consolidated Safety Rank at 98, which means that the company has a financing structure that is safer than those of 98% 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 48, which means that the share price of Renishaw 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 49, 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 47, which means that professional investors are more pessimistic about the stock than for 53% 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 69, Renishaw is better positioned than 69% 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 47. The negative market view on Renishaw 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

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Sentiment Strategy: Professional Market Sentiment for Renishaw only reserved

SENTIMENT METRICS	September 5, 2024
ANALYST OPINION
ANALYST OPINION	17
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	77
MARKET PULSE
MARKET PULSE	36
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	47

ANALYSIS: With an Obermatt Sentiment Rank of 47 (better than 47% compared with alternatives), overall professional sentiment and engagement for the stock Renishaw 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 Renishaw. Analyst Opinions are at a rank of 17 (worse than 83% 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 50, 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 Renishaw. More encouragingly, the Professional Investors rank is 77, which means that professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 36, 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 64% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 47 (less encouraging than 53% compared with investment alternatives), Renishaw has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Renishaw. 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

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Value Strategy: Renishaw Stock Price Value below-average critical

VALUE METRICS	September 5, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	27
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	56
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	39
DIVIDEND YIELD
DIVIDEND YIELD	74
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48

ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Renishaw 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 Renishaw. Price-to-Profit (also referred to as price-earnings, P/E) is 56 which means that the stock price compared with what market professionals expect for future profits is lower than for 56% of comparable companies, indicating a good value concerning Renishaw's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 39, which means that the stock price is lower as regards to invested capital than for 39% of comparable investments. On the other hand, Price-to-Sales is less favorable than 73% of alternatives (only 27% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 26% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Renishaw's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more

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Growth Strategy: Renishaw Growth Momentum low

GROWTH METRICS	September 5, 2024
REVENUE GROWTH
REVENUE GROWTH	31
PROFIT GROWTH
PROFIT GROWTH	27
CAPITAL GROWTH
CAPITAL GROWTH	76
STOCK RETURNS
STOCK RETURNS	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	49

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Renishaw 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 Renishaw. Capital Growth has a rank of 76, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 57 (above 57% of alternative investments). But Sales Growth has only a rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Profit Growth is also low at a rank of 27. ...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 Renishaw, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more

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Safety Strategy: Renishaw Debt Financing Safety very solid

SAFETY METRICS	September 5, 2024
LEVERAGE
LEVERAGE	95
REFINANCING
REFINANCING	53
LIQUIDITY
LIQUIDITY	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98

ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2024, the company Renishaw has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Renishaw 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 Renishaw. Leverage is at 95, meaning the company has a below-average debt-to-equity ratio. It has less debt than 95% of its competitors. Refinancing is at a rank of 53, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 53% 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 98 (better than 98% compared with alternatives), Renishaw 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

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Combined financial peformance: Renishaw Top Financial Performance

COMBINED PERFORMANCE	September 5, 2024
VALUE
VALUE	48
GROWTH
GROWTH	49
SAFETY
SAFETY	100
COMBINED
COMBINED	78

ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Renishaw (Electronic Equipment, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Renishaw are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives) and show below-average growth (Growth Rank of 49) but are safely financed (Safety Rank of 98), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Renishaw's financial characteristics. As the company Renishaw's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 48) and low growth (Obermatt Growth Rank of 49), 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 98) 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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