March 14, 2024
Top 10 Stock SKYCITY 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: SKYCITY – Top 10 Stock in New Zealand Stock Exchange Index NZSX 50
SKYCITY is listed as a top 10 stock on March 14, 2024 in the market index NZSX 50 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 50 (high 50% performer), Obermatt assesses an overall buy recommendation for SKYCITY on March 14, 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 SKYCITY Buy
| 360 METRICS | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| SENTIMENT | ||||||||
| SENTIMENT | 52 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock SKYCITY are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for SKYCITY. The consolidated Value Rank has an attractive rank of 98, which means that the share price of SKYCITY is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 98% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 52, which means that professional investors are more optimistic about the stock than for 52% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 5, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 44, meaning the company has a riskier financing structure than 56 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, SKYCITY is better positioned than 50% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 98) and positive market sentiment in the professional investor community (Sentiment Rank of 52), but growth expectations are below-average (Growth Rank of 5) and the financing structure is on the risky side(Safety Rank of 44). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of SKYCITY is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for SKYCITY positive
ANALYSIS: With an Obermatt Sentiment Rank of 52 (better than 52% compared with alternatives), overall professional sentiment and engagement for the stock SKYCITY is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SKYCITY. Analyst Opinions are at a rank of 51 (better than 51% 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 62, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in SKYCITY. Finally, the Professional Investors rank is 60, which means that currently, professional investors hold more stock in this company than in 60% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 52 (more positive than 52% compared with investment alternatives), SKYCITY has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 30, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 70% of competitors). This could mean future risks and should make investors careful. Attention to negative news for SKYCITY is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: SKYCITY Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 98 (better than 98% compared with alternatives) for 2024, SKYCITY shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for SKYCITY. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 95 which means that the stock price compared with what market professionals expect for future profits is lower than for 95% of comparable companies, indicating a good value concerning SKYCITY's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 84, and for Dividend Yield with a Dividend Yield Rank of 100. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 53% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 47). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 98, is a buy recommendation based on SKYCITY's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that SKYCITY has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing SKYCITY shares. ...read more
Growth Strategy: SKYCITY Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 5 (better than 5% compared with alternatives), SKYCITY 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 SKYCITY. While Sales Growth ranks at 56, professionals currently expect the company to grow more than 56% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 15, which means that, currently, professionals expect the company to grow its profits less than 85% of its competitors, and Capital Growth has a low rank of 5. Historic stock returns were also below average with a current Stock Returns rank of 31 which means that the stock returns have recently been below 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 5, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: SKYCITY Debt Financing Safety below-average
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 53 |
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| REFINANCING | ||||||||
| REFINANCING | 19 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 51 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 44 |
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ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% compared with alternatives), the company SKYCITY has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of SKYCITY is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, 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 SKYCITY. Leverage is at a rank of 53, meaning the company has a below-average debt-to-equity ratio. It has less debt than 53% of its competitors. Liquidity is also good at a rank of 51, meaning the company generates more profit to service its debt than 51% 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 19, 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 81% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% compared with alternatives), SKYCITY has a financing structure that is riskier 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 SKYCITY. 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: SKYCITY Above-Average Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| COMBINED | ||||||||
| COMBINED | 50 |
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ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), SKYCITY (Casinos & Gaming, New Zealand) shares have above-average financial characteristics compared with similar stocks. Shares of SKYCITY are a good value (attractively priced) with a consolidated Value Rank of 98 (better than 98% of alternatives) but show below-average growth (Growth Rank of 5), and are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on SKYCITY's financial characteristics. As the company SKYCITY's key financial metrics exhibit good value (Obermatt Value Rank of 98) but low growth (Obermatt Growth Rank of 5) and risky financing practices (Obermatt Safety Rank of 44), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 98% of comparable companies, may indicate 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. ...read more
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