December 26, 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 December 26, 2024 in the market index PSI General because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 17 (17% performer), Obermatt issues an overall sell recommendation for Sporting CP on December 26, 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 | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 56 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 8 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 62 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 17 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 17 (better than 17% 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 half of the metrics below and half above average for Sporting CP. The consolidated Growth Rank has a good rank of 56, 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. This means that growth is higher than for 56% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 62, which means that professional investors are more optimistic about the stock than for 62% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 20, which means that the share price of Sporting CP is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 80% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 8, which means that the company has a financing structure that is riskier than those of 92% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 17, Sporting CP is worse than 83% of all alternative stock investment opportunities based on the Obermatt Method. This means that Sporting CP shares are on the riskier side for investors. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 56), and professional market sentiment is positive (Sentiment Rank of 62), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Sporting CP positive
ANALYSIS: With an Obermatt Sentiment Rank of 62 (better than 62% compared with alternatives), overall professional sentiment and engagement for the stock Sporting CP is above average.
RECOMMENDATION: With a consolidated Sentiment Rank of 62 (more positive than 62% compared with investment alternatives), Sporting CP has a reputation among professional investors that is above-average compared with that of its competitors.
Value Strategy: Sporting CP Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% 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 94, which means that the stock price compared with what market professionals expect for future profits is lower than for 94% of comparable companies, indicating a good value concerning Sporting CP's profit levels. But Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than for 83% 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 9 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 20, 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 56 (better than 56% 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. Capital Growth has a rank of 84, which means that currently professionals expect the company to grow its invested capital more than 37% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 60 (above 60% of alternative investments). But Sales Growth has only a rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Profit Growth is also low at a rank of 37. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 56, is a buy 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 Sporting CP, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Sporting CP Debt Financing Safety risky
| SAFETY METRICS | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 11 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 12 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 8 |
|
||||||
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 12 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 88% 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 | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 20 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 56 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 8 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 17 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% 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 20 (worse than 80% of alternatives), and are riskily financed (Safety Rank of 8, which means above-average debt burdens) but show above-average growth (Growth Rank of 56). ...read more
RECOMMENDATION: A Combined Rank of 17, 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 20 (80% 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 56% of comparable companies (Obermatt Growth Rank is 56). 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.