September 12, 2024
Top 10 Stock SMTH 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: SMTH – Top 10 Stock in Nikkei 225 Index
SMTH is listed as a top 10 stock on September 12, 2024 in the market index Nikkei 225 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. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for SMTH on September 12, 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 Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock SMTH are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for SMTH. The consolidated Value Rank has an attractive rank of 67, which means that the share price of SMTH is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 67% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 87, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 51. But the company’s financing is risky with a Safety rank of 26. This means 74% of comparable companies have a safer financing structure than SMTH. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, SMTH is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 67), above-average growth (Growth Rank of 87), and positive market sentiment in the professional investor community (Sentiment Rank of 51), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 26), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of SMTH is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for SMTH positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock SMTH is above 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 71 (better than 71% 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 59, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 56, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 56% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 33, which means that currently, professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), SMTH has a reputation among professional investors that is above-average compared with 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 better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), SMTH shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for SMTH. Price-to-Sales is 61 which means that the stock price compared with what market professionals expect for future sales is lower than for 61% of comparable companies, indicating a good value for SMTH'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 52. Compared with other companies in the same industry, dividend yields of SMTH are expected to be higher than for 64% of all competitors (a Dividend Yield rank of 64). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on SMTH'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 SMTH based on its detailed value metrics.
Growth Strategy: SMTH Growth Momentum high
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 57 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 45 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 61 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 87 |
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ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% 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 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Both Profit Growth, with a rank of 100, and Stock Returns, with a rank of 61, are also above average. But Capital Growth only has a rank of 45, which means that, currently, professionals expect the company to grow its invested capital less than 55% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, 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 below-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 80 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 12 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company SMTH 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 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 80 meaning the company has a below-average debt-to-equity ratio. It has less debt than 80% of its competitors.Refinancing is at a rank of 34, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 66% of its competitors. Liquidity is at a rank of 12, meaning that the company generates less profit to service its debt than 88% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), SMTH has a financing structure that is 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 12 |
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| COMBINED | ||||||||
| COMBINED | 70 |
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ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), SMTH (Diversified Banks, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of SMTH are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives), show above-average growth (Growth Rank of 87) but are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on SMTH's financial characteristics. As the company SMTH's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 67) and above-average growth (Obermatt Growth Rank of 87), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 26) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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