September 12, 2024
Top 10 Stock Smiths 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: Smiths – Top 10 Stock in FTSE 100 Index
Smiths is listed as a top 10 stock on September 12, 2024 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 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Smiths on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Industrial Conglomerates |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Employee Focus EU |
| Size class | X-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 Smiths Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Smiths are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Smiths. The consolidated Value Rank has an attractive rank of 61, which means that the share price of Smiths 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 61% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 50. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. But the consolidated Growth Rank has a low rank of 45, 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. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Smiths is better positioned than 61% 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 61), secure financing practices (Safety Rank of 50), and positive market sentiment in the professional investor community (Sentiment Rank of 85). 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 45), 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 Smiths 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 Smiths very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Smiths is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Smiths. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 81, which means that currently, professional investors hold more stock in this company than in 81% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 90 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 90% of competitors). But Analyst Opinions Change has a below-average rank of 29, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Smiths. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Smiths has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Smiths Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% compared with alternatives), Smiths shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Smiths. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning Smiths'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 54, and for Dividend Yield with a Dividend Yield Rank of 82. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 52% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 48). 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 61, is a buy recommendation based on Smiths'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 Smiths 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 Smiths shares. ...read more
Growth Strategy: Smiths Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 17 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 49 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 53 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 65 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 45 |
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ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Smiths 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 Smiths. Capital Growth has a rank of 53, which means that currently professionals expect the company to grow its invested capital more than 49% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 17, which means that, currently, professionals expect the company to grow less than 83% of its competitors, and Profit Growth is also low at a rank of 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Smiths, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Smiths Debt Financing Safety above-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 65 |
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| REFINANCING | ||||||||
| REFINANCING | 42 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 43 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 50 |
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ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company Smiths 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 Smiths 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 Smiths and the other two below average. Leverage is at a rank of 65 meaning the company has a below-average debt-to-equity ratio. It has less debt than 65% of its competitors.Refinancing is at a rank of 42, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 58% of its competitors. Liquidity is at a rank of 43, meaning that the company generates less profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 50 (better than 50% compared with alternatives), Smiths has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Smiths are on the safer side. ...read more
Combined financial peformance: Smiths Below-Average Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| COMBINED | ||||||||
| COMBINED | 48 |
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ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Smiths (Industrial Conglomerates, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Smiths are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives), are safely financed (Safety Rank of 50, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 48, is a hold recommendation based on Smiths's financial characteristics. As the company Smiths's key financial metrics exhibit good value (Obermatt Value Rank of 61) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 50), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 61% 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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