August 22, 2024
Top 10 Stock SMTH Hold 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: SMTH – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
SMTH is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for SMTH on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Diversified Banks |
| Index | TOPIX 100, Nikkei 225 |
| 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 SMTH Hold
| 360 METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 40 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 86 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 20 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 42 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 45 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock SMTH are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for SMTH. The consolidated Growth Rank has a good rank of 86, 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. It ranks higher than 86% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 40 means that the share price of SMTH is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 60% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 20, which means that the company has a riskier financing structure than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 42, indicating professional investors are more pessimistic about the stock than for 58% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, SMTH is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 86), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 42), the company is rather risky when it comes to financing (Safety Rank of 20). The negative market view on SMTH may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of SMTH compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for SMTH only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock SMTH is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SMTH. Analyst Opinions are at a rank of 73 (better than 73% 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 65, 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 12, which means that currently, professional investors hold less stock in this company than in 88% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), SMTH has a reputation among professional investors that is below that of its competitors. Not having too many professionals invested in SMTH 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 SMTH. ...read more
Value Strategy: SMTH Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), SMTH shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for SMTH. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value concerning SMTH's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 64, which means that dividends are expected to be higher than for 64% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 53% of alternatives (only 47% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 93% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on SMTH's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: SMTH Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 86 (better than 86% compared with alternatives) for 2024, SMTH shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for SMTH. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 100, and Stock Returns, with a rank of 63, are also above average. But Capital Growth only has a rank of 49, which means that, currently, professionals expect the company to grow its invested capital less than 51% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 86, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: SMTH Debt Financing Safety risky
| SAFETY METRICS | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 78 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 32 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company SMTH has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of SMTH 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 just one indicator above average for SMTH and the other two below average. Leverage is at a rank of 78 meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors.Refinancing is at a rank of 32, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 68% of its competitors. Liquidity is at a rank of 8, meaning that the company generates less profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), SMTH has a financing structure that is significantly riskier 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 SMTH are on the safer side. ...read more
Combined financial peformance: SMTH Below-Average Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 40 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 86 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 8 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 43 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), SMTH (Diversified Banks, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SMTH are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives), and are riskily financed (Safety Rank of 20, which means above-average debt burdens) but show above-average growth (Growth Rank of 86). ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on SMTH's financial characteristics. As the company SMTH shows low value with an Obermatt Value Rank of 40 (60% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 86% of comparable companies (Obermatt Growth Rank is 86). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 20 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for SMTH, even a low-value company (in terms of its key financial indicators) can be a good investment. ...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.