August 24, 2023
Top 10 Stock SPX Strong 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: SPX – Top 10 Stock in SDG 5: Gender Equality
SPX is listed as a top 10 stock on August 24, 2023 in the market index SDG 5 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for SPX on August 24, 2023.
Snapshot: Obermatt Ranks
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 SPX Strong Buy
| 360 METRICS | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 45 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 93 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 68 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 72 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 84 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock SPX are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for SPX. The consolidated Growth Rank has a good rank of 93, 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 93% of competitors in the same industry. The consolidated Safety Rank at 68 means that the company has a financing structure that is safer than 68% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 72, which means that professional investors are more optimistic about the stock than for 72% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 45, meaning that the share price of SPX is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 55% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, SPX is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 93), a safe financing structure (Safety Rank of 68), and positive professional market sentiment (Sentiment Rank of 72), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of SPX compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (93% better than peers). The value rank could be the reverse reflection of that (7%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the 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 SPX positive
ANALYSIS: With an Obermatt Sentiment Rank of 72 (better than 72% compared with alternatives), overall professional sentiment and engagement for the stock SPX is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SPX. Analyst Opinions are at a rank of 87 (better than 87% 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 90, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 61, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 61% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 24, which means that currently, professional investors hold less stock in this company than in 76% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 72 (more positive than 72% compared with investment alternatives), SPX has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in SPX 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 SPX. ...read more
Value Strategy: SPX Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 45 (worse than 55% compared with alternatives), SPX shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for SPX. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value regarding SPX's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 53. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than SPX (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 45, is a hold recommendation based on SPX's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: SPX Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2023, SPX 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 SPX. Sales Growth has a value of 77, which means that, currently, professionals expect the company to grow more than 77% of its competitors. The same is valid for Profit Growth with a value of 89 and for Capital Growth with 56. In addition, Stock Returns had an above-average rank value of 83, which means they have been higher than 83% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, SPX 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. ...read more
Safety Strategy: SPX Debt Financing Safety above-average
| SAFETY METRICS | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 78 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 53 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 32 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 68 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 68 (better than 68% compared with alternatives), the company SPX has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of SPX is safe, it only means that the company is on the safer side regarding possible bankruptcy, 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 SPX.Leverage is at 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 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 32, meaning that the company generates less profit to service its debt than 68% 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 68 (better than 68% compared with alternatives), SPX has a financing structure that is safer 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. ...read more
Combined financial peformance: SPX Top Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 45 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 93 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 32 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 84 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), SPX (Industrial Machinery, USA) shares have much better financial characteristics than comparable stocks. Shares of SPX are low in value (priced high) with a consolidated Value Rank of 45 (worse than 55% of alternatives). But they show above-average growth (Growth Rank of 93) and are safely financed (Safety Rank of 68, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on SPX's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company SPX exhibits low value (Obermatt Value Rank of 45), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 93). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 68) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...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.