August 22, 2024
Top 10 Stock Resona 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: Resona – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Resona is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 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 37 (37% performer), Obermatt assesses an overall hold recommendation for Resona on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Regional Banks |
| Index | TOPIX 100, Nikkei 225 |
| 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 Resona Hold
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 26 |
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| GROWTH | ||||||||
| GROWTH | 38 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Resona are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Resona. 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 26, which means that the share price of Resona 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 38, 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 18, which means that professional investors are more pessimistic about the stock than for 82% 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 37, Resona is worse than 63% 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 18. The negative market view on Resona 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 Resona negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock Resona 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 Resona. Analyst Opinions are at a rank of 64 (better than 64% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 60 which means that currently, stock research experts are getting even more optimistic about investments in Resona. But Market Pulse has a low 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). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 14, which means that, currently, professional investors hold less stock in this company than in 86% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), Resona has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Resona Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 26 (worse than 74% compared with alternatives), Resona shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Resona. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than 58% of comparable companies, indicating a good value concerning to Resona's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 6, meaning that dividends are expected to be lower than for 94% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 52% of alternatives (only 48% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 64% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 26, is a hold recommendation based on Resona's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Resona could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Resona looks like an expensive investment today. ...read more
Growth Strategy: Resona Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 38 (better than 38% compared with alternatives), Resona 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 Resona. Sales Growth has a rank of 61 which means that currently professionals expect the company to grow more than 61% of its competitors. Stock Returns are also above average with a rank of 67. But Capital Growth has only a rank of 27, which means that currently professionals expect the company to grow its invested capital less than 73% of its competitors. Profit Growth is also low, with a rank of only 36, 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 38, is a hold 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 67% 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: Resona Debt Financing Safety very solid
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 98 |
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| REFINANCING | ||||||||
| REFINANCING | 57 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
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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 Resona has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Resona 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 Resona. Leverage is at 98, meaning the company has a below-average debt-to-equity ratio. It has less debt than 98% of its competitors. Refinancing is at a rank of 57, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Finally, Liquidity is also good at a rank of 95, which means that the company generates more profit to service its debt than 95% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Resona 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: Resona Above-Average Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 26 |
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| GROWTH | ||||||||
| GROWTH | 38 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Resona (Regional Banks, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Resona are low in value (priced high) with a consolidated Value Rank of 26 (worse than 74% of alternatives) and show below-average growth (Growth Rank of 38) but are safely financed (Safety Rank of 98), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Resona's financial characteristics. As the company Resona's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 26) and low growth (Obermatt Growth Rank of 38), 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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