Fact based stock research
South32 (ASX:S32)
AU000000S320
How to read the free 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.
South32 stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), South32 (Diversified Metals & Mining, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of South32 are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), and are riskily financed (Safety Rank of 27, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on South32's financial characteristics. As the company South32 shows low value with an Obermatt Value Rank of 47 (53% 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 97% of comparable companies (Obermatt Growth Rank is 97). 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 27 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 South32, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° ViewnewThis stock has achievements: Top 10 Stock.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: South32
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
57 |
|
56 |
|
47 |
|
| GROWTH | ||||||||
| GROWTH | 69 |
|
81 |
|
49 |
|
97 |
|
| SAFETY | ||||||||
| SAFETY | 98 |
|
84 |
|
55 |
|
27 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
88 |
|
42 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
100 |
|
38 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), South32 (Diversified Metals & Mining, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of South32 are low in value (priced high) with a consolidated Value Rank of 47 (worse than 53% of alternatives), and are riskily financed (Safety Rank of 27, which means above-average debt burdens) but show above-average growth (Growth Rank of 97). ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on South32's financial characteristics. As the company South32 shows low value with an Obermatt Value Rank of 47 (53% 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 97% of comparable companies (Obermatt Growth Rank is 97). 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 27 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 South32, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 48 |
|
57 |
|
56 |
|
47 |
|
| GROWTH | ||||||||
| GROWTH | 69 |
|
81 |
|
49 |
|
97 |
|
| SAFETY | ||||||||
| SAFETY | 98 |
|
84 |
|
55 |
|
27 |
|
| COMBINED | ||||||||
| COMBINED | 73 |
|
100 |
|
51 |
|
55 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 47 (worse than 53% compared with alternatives), South32 shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for South32. Expected dividend yields are higher than for 67% of comparable companies (a Dividend Yield rank of 67), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 43 which means that the stock price compared with what market professionals expect for future profits is higher than for 57% of comparable companies, indicating a low value concerning South32's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for South32 with a rank of 23. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 77% of comparable companies, indicating a low value concerning South32's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 47, is a hold recommendation based on South32's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, South32 may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 60 |
|
41 |
|
47 |
|
43 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 1 |
|
59 |
|
51 |
|
23 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 68 |
|
47 |
|
58 |
|
53 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 64 |
|
78 |
|
73 |
|
67 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 48 |
|
57 |
|
56 |
|
47 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, South32 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 four indicators above average for South32. Sales Growth has a value of 71, which means that, currently, professionals expect the company to grow more than 71% of its competitors. The same is valid for Profit Growth with a value of 82 and for Capital Growth with 82. In addition, Stock Returns had an above-average rank value of 57, which means they have been higher than 57% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, South32 exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 38 |
|
28 |
|
73 |
|
71 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 7 |
|
81 |
|
34 |
|
82 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
59 |
|
68 |
|
82 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 84 |
|
83 |
|
19 |
|
57 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 69 |
|
81 |
|
49 |
|
97 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company South32 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 South32 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 where two out of three are above average for South32.Leverage is at 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 53, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Liquidity is at 25, meaning that the company generates less profit to service its debt than 75% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), South32 has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for South32 more challenging. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 64 |
|
66 |
|
54 |
|
56 |
|
| REFINANCING | ||||||||
| REFINANCING | 70 |
|
100 |
|
49 |
|
53 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 97 |
|
42 |
|
51 |
|
25 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
|
84 |
|
55 |
|
27 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
64 |
|
86 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
20 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
61 |
|
23 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
89 |
|
67 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
88 |
|
42 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for South32 from November 14, 2024.
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