June 22, 2023
Top 10 Stock Shell Strong 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: Shell – Top 10 Stock in FTSE 100 Index
Shell is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Shell on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Netherlands |
| Industry | Oil & Gas Integrated |
| Index | AEX, FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Employee Focus EU, Diversity Europe, Human Rights |
| 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 Shell Strong Buy
| 360 METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 69 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 49 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 71 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 63 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 77 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Shell are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Shell. The consolidated Value Rank has an attractive rank of 69, which means that the share price of Shell is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 69% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 71. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 63. But the consolidated Growth Rank has a low rank of 49, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 51 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 77, Shell is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 69), secure financing practices (Safety Rank of 71), and positive market sentiment in the professional investor community (Sentiment Rank of 63). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 49), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Shell is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Shell positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Shell is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Shell. 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. In addition, Analyst Opinions Change has a rank of 76, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 54, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 54% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 30, which means that currently, professional investors hold less stock in this company than in 70% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Shell has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in Shell may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Shell. ...read more
Value Strategy: Shell Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Shell shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Shell. Price-to-Sales is 68 which means that the stock price compared with what market professionals expect for future sales is lower than for 68% of comparable companies, indicating a good value for Shell's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 60% 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 58. Compared with other companies in the same industry, dividend yields of Shell are expected to be higher than for 55% of all competitors (a Dividend Yield rank of 55). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a BUY recommendation based on Shell'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 Shell based on its detailed value metrics.
Growth Strategy: Shell Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Shell 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 all but one indicator above average for Shell. Sales Growth has a rank of 52 which means that currently, professionals expect the company to grow more than 52% of its competitors. Capital Growth is also above 34% of competitors with a rank of 58, and Stock Returns with the rank of 65 is also an outperformance. Only Profit Growth is low with a rank of 34 which means that currently, professionals expect the company to grow its profits less than 66% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a HOLD 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, Shell is a good growth stock. ...read more
Safety Strategy: Shell Debt Financing Safety above-average
| SAFETY METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 63 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 48 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 71 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), the company Shell 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 Shell 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 Shell. Leverage is at a rank of 63, meaning the company has a below-average debt-to-equity ratio. It has less debt than 63% of its competitors. Liquidity is also good at a rank of 71, meaning the company generates more profit to service its debt than 71% 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 48, 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 52% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), Shell has a financing structure that is 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 Shell. 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: Shell Top Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 69 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 49 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 71 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 75 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), Shell (Oil & Gas Integrated, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of Shell are a good value (attractively priced) with a consolidated Obermatt Value Rank of 69 (better than 69% of alternatives), are safely financed (Safety Rank of 71, which means low debt burdens), but show below-average growth (Growth Rank of 49). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 75, is a strong buy recommendation based on Shell's financial characteristics. As the company Shell's key financial metrics exhibit good value (Obermatt Value Rank of 69) but low growth (Obermatt Growth Rank of 49) while being safely financed (Obermatt Safety Rank of 71), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 69% 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.