July 18, 2024
Top 10 Stock Sime Darby 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: Sime Darby – Top 10 Stock in Independent Boards in Growth Markets
Sime Darby is listed as a top 10 stock on July 18, 2024 in the market index Independent Boards Growth Markets 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 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Sime Darby on July 18, 2024.
Snapshot: Obermatt Ranks
| Country | Malaysia |
| Industry | Industrial Conglomerates |
| Index | Good Governace Growth Markets, Independent Boards Growth Markets |
| 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 Sime Darby Strong Buy
| 360 METRICS | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| SENTIMENT | ||||||||
| SENTIMENT | 98 |
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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 Sime Darby are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Sime Darby. The consolidated Value Rank has an attractive rank of 86, which means that the share price of Sime Darby 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 86% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 61. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 98. But the consolidated Growth Rank has a low rank of 37, 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. 63 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Sime Darby is better positioned than 98% 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 86), secure financing practices (Safety Rank of 61), and positive market sentiment in the professional investor community (Sentiment Rank of 98). 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 37), 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 Sime Darby 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 Sime Darby very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Sime Darby is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Sime Darby. Analyst Opinions are at a rank of 59 (better than 59% 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 71, 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 Sime Darby. The Professional Investors rank is 80, which means that currently, professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 87 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 87% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Sime Darby 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 Sime Darby 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: Sime Darby Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2024, Sime Darby shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sime Darby. Price-to-Sales is 88 which means that the stock price compared with what market professionals expect for future sales is lower than for 88% of comparable companies, indicating a good value for Sime Darby's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 69% 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 69. Compared with other companies in the same industry, dividend yields of Sime Darby are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 86, is a buy recommendation based on Sime Darby'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 Sime Darby based on its detailed value metrics.
Growth Strategy: Sime Darby Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Sime Darby 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 Sime Darby. Sales Growth has a rank of 71 which means that currently professionals expect the company to grow more than 71% of its competitors. Stock Returns are also above average with a rank of 61. But Capital Growth has only a rank of 1, which means that currently professionals expect the company to grow its invested capital less than 99% of its competitors. Profit Growth is also low, with a rank of only 29, 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 37, 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 61% 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: Sime Darby Debt Financing Safety above-average
| SAFETY METRICS | July 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 80 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 61 |
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ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Sime Darby 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 Sime Darby 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 Sime Darby. Refinancing is at 80, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 80% of its competitors. Liquidity is also good at 50, meaning the company generates more profit to service its debt than 50% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 47, which means the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Sime Darby has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Sime Darby could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Sime Darby Top Financial Performance
| COMBINED PERFORMANCE | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Sime Darby (Industrial Conglomerates, Malaysia) shares have much better financial characteristics than comparable stocks. Shares of Sime Darby are a good value (attractively priced) with a consolidated Value Rank of 86 (better than 86% of alternatives), are safely financed (Safety Rank of 61, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Sime Darby's financial characteristics. As the company Sime Darby's key financial metrics exhibit good value (Obermatt Value Rank of 86) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 61), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 86% 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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