June 20, 2024
Top 10 Stock Sasol 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: Sasol – Top 10 Stock in Human Rights Leaders


sasol.com


Sasol is listed as a top 10 stock on June 20, 2024 in the market index Human Rights because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 58 (high 58% performer), Obermatt assesses an overall buy recommendation for Sasol on June 20, 2024.


Snapshot: Obermatt Ranks


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Top 10 Stocks ≠ most popular stocks

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 Sasol Buy

360 METRICS June 20, 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

ANALYSIS: With an Obermatt 360° View of 58 (better than 58% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sasol are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sasol. The consolidated Value Rank has an attractive rank of 100, which means that the share price of Sasol is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 100% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 66. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 28. Professional investors are more confident in 72% other stocks. The consolidated Growth Rank also has a low rank of 3, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 97 of its competitors have better growth. ...read more

RECOMMENDATION: With a consolidated 360° View of 58, Sasol is better positioned than 58% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 100), and the financing structure is on the safer side (Safety Rank of 66). However, sentiment in the professional investor community is below-average (Sentiment Rank of 28), as is the growth momentum for the company (Growth Rank of 3). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more




Sentiment Strategy: Professional Market Sentiment for Sasol only reserved

SENTIMENT METRICS June 20, 2024
ANALYST OPINION
ANALYST OPINION
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

ANALYSIS: With an Obermatt Sentiment Rank of 28 (better than 28% compared with alternatives), overall professional sentiment and engagement for the stock Sasol is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Sasol. Analyst Opinions are at a rank of 79 (better than 79% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 24, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Sasol. The Professional Investors rank is also low at 13, meaning that professional investors hold less stock in this company than in 87% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 31, which means that the current professional news and professional social networks are critical of this company (more negative news than for 69% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 28 (less encouraging than 72% compared with investment alternatives), Sasol has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more



Value Strategy: Sasol Stock Price Value at the top

VALUE METRICS June 20, 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

ANALYSIS: With an Obermatt Value Rank of 100 (better than 100% compared with alternatives) for 2024, Sasol shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sasol. Price-to-Sales is 91 which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value for Sasol's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 100% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 97. Compared with other companies in the same industry, dividend yields of Sasol are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 100, is a buy recommendation based on Sasol's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Sasol based on its detailed value metrics.



Growth Strategy: Sasol Growth Momentum negative

GROWTH METRICS June 20, 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Sasol 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 Sasol. Only Capital Growth has a good rank of 53, which means that currently professionals expect the company to grow its invested capital more than 4% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 8 which means that currently professionals expect the company to grow less than 92% of its competitors. Profit Growth with a rank of 4 and Stock Returns with a rank of 3 are also low (below 97% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Sasol is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more



Safety Strategy: Sasol Debt Financing Safety above-average

SAFETY METRICS June 20, 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Sasol has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Sasol 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 just one indicator above average for Sasol and the other two below average. Refinancing is at 92, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. But Leverage is high with a rank of 23, meaning the company has an above-average debt-to-equity ratio. It has more debt than 77% of its competitors. Liquidity is also on the riskier side with a rank of 49, meaning the company generates less profit to service its debt than 51% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Sasol has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Sasol are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more



Combined financial peformance: Sasol Above-Average Financial Performance

COMBINED PERFORMANCE June 20, 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), Sasol (Diversified Chemicals, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Sasol are a good value (attractively priced) with a consolidated Value Rank of 100 (better than 100% of alternatives), are safely financed (Safety Rank of 66, which means low debt burdens), but show below-average growth (Growth Rank of 3). ...read more

RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on Sasol's financial characteristics. As the company Sasol's key financial metrics exhibit good value (Obermatt Value Rank of 100) but low growth (Obermatt Growth Rank of 3) while being safely financed (Obermatt Safety Rank of 66), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 100% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more

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