June 6, 2024
Top 10 Stock Silicon Motion Technology 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: Silicon Motion Technology – Top 10 Stock in Nasdaq Composite Index
Silicon Motion Technology is listed as a top 10 stock on June 06, 2024 in the market index NASDAQ 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 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Silicon Motion Technology on June 06, 2024.
Snapshot: Obermatt Ranks
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 Silicon Motion Technology Strong Buy
| 360 METRICS | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 96 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Silicon Motion Technology are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Silicon Motion Technology. 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 100 means that the company has a financing structure that is safer than 100% 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 96, which means that professional investors are more optimistic about the stock than for 96% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 38, meaning that the share price of Silicon Motion Technology is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 62% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Silicon Motion Technology is better positioned than 98% 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 100), and positive professional market sentiment (Sentiment Rank of 96), 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 Silicon Motion Technology 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 Silicon Motion Technology very positive
ANALYSIS: With an Obermatt Sentiment Rank of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Silicon Motion Technology is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Silicon Motion Technology. Analyst Opinions are at a rank of 72 (better than 72% 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 with a rank of 81, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Silicon Motion Technology. The Professional Investors rank is 68, which means that currently, professional investors hold more stock in this company than in 68% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 68 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 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 96 (more positive than 96% compared with investment alternatives), Silicon Motion Technology has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Silicon Motion Technology stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Silicon Motion Technology Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 38 (worse than 62% compared with alternatives), Silicon Motion Technology shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Silicon Motion Technology. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 63% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 43 which means that the stock price compared with what market professionals expect for future profits is higher than 57% of comparable companies, indicating a low value concerning Silicon Motion Technology's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 43 which means that the stock price compared with what market professionals expect for future profit levels is higher than 57% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 38 is also low. Compared with invested capital, the stock price is higher than for 62% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 38, is a hold recommendation based on Silicon Motion Technology's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Silicon Motion Technology? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Silicon Motion Technology only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Silicon Motion Technology Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Silicon Motion Technology 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 Silicon Motion Technology. Profit Growth has a rank of 71 which means that currently professionals expect the company to grow its profits more than 71% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 66, and Stock Returns has a rank of 55 which means that the stock returns have recently been above 55% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 20 (80% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Silicon Motion Technology Debt Financing Safety very solid
| SAFETY METRICS | June 6, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Silicon Motion Technology has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Silicon Motion Technology 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 Silicon Motion Technology. Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Refinancing is at a rank of 63, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. Finally, Liquidity is also good at a rank of 96, which means that the company generates more profit to service its debt than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Silicon Motion Technology 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: Silicon Motion Technology Top Financial Performance
| COMBINED PERFORMANCE | June 6, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 38 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Silicon Motion Technology (Semiconductors, Taiwan) shares have much better financial characteristics than comparable stocks. Shares of Silicon Motion Technology are low in value (priced high) with a consolidated Value Rank of 38 (worse than 62% of alternatives). But they show above-average growth (Growth Rank of 59) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Silicon Motion Technology's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Silicon Motion Technology exhibits low value (Obermatt Value Rank of 38), 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 100) 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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