May 16, 2024
Top 10 Stock Sporting CP Sell 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: Sporting CP – Top 10 Stock in Portuguese Stock Index PSI General
Sporting CP is listed as a top 10 stock on May 16, 2024 in the market index PSI General 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 16 (16% performer), Obermatt issues an overall sell recommendation for Sporting CP on May 16, 2024.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Movies & Entertainment |
| Index | PSI General |
| Size class | Small |
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 Sporting CP Sell
| 360 METRICS | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| SENTIMENT | ||||||||
| SENTIMENT | 43 |
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| 360° VIEW | ||||||||
| 360° VIEW | 16 |
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ANALYSIS: With an Obermatt 360° View of 16 (better than 16% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sporting CP are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Sporting CP. The consolidated Growth Rank has a good rank of 61, 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 61% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 17 means that the share price of Sporting CP is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 83% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 8, which means that the company has a riskier financing structure than 92% 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 43, indicating professional investors are more pessimistic about the stock than for 57% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 16, Sporting CP is worse than 84% of all alternative stock investment opportunities based on the Obermatt Method. This means that Sporting CP shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 61), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 43), the company is rather risky when it comes to financing (Safety Rank of 8). The negative market view on Sporting CP 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 Sporting CP 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 Sporting CP only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock Sporting CP is below industry average.
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), Sporting CP has a reputation among professional investors that is below that of its competitors.
Value Strategy: Sporting CP Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Sporting CP shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Sporting CP. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 100, which means that the stock price compared with what market professionals expect for future profits is lower than for 100% of comparable companies, indicating a good value concerning Sporting CP's profit levels. But Price-to-Sales is 16 which means that the stock price compared with what market professionals expect for future profits is higher than for 84% of comparable companies, indicating a low value concerning Sporting CP's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 29 and for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Sporting CP's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Sporting CP is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: Sporting CP Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 61 (better than 61% compared with alternatives), Sporting CP shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Sporting CP. Profit Growth has a rank of 52, which means that currently professionals expect the company to grow its profits more than 52% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 31, which means that, currently, professionals expect the company to grow less than 69% of its competitors, and Capital Growth also has a lower rank of 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 61, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Sporting CP. ...read more
Safety Strategy: Sporting CP Debt Financing Safety risky
| SAFETY METRICS | May 16, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 11 |
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| REFINANCING | ||||||||
| REFINANCING | 18 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 8 |
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ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Sporting CP 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 Sporting CP 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 all three metrics below average for Sporting CP. Liquidity is at 8, meaning that the company generates less profit to service its debt than 92% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 11, meaning the company has an above-average debt-to-equity ratio. It has more debt than 89% of its competitors. Finally, Refinancing is at a rank of 18 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 82% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Sporting CP has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Sporting CP Lowest Financial Performance
| COMBINED PERFORMANCE | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 61 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 6 |
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ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Sporting CP (Movies & Entertainment, Portugal) shares have lower financial characteristics compared with similar stocks. Shares of Sporting CP are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), and are riskily financed (Safety Rank of 8, which means above-average debt burdens) but show above-average growth (Growth Rank of 61). ...read more
RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Sporting CP's financial characteristics. As the company Sporting CP shows low value with an Obermatt Value Rank of 17 (83% 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 61% of comparable companies (Obermatt Growth Rank is 61). 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 8 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 Sporting CP, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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