March 28, 2024
Top 10 Stock STMicroelectronics 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: STMicroelectronics – Top 10 Stock in Renewable Energy Use Leaders
STMicroelectronics is listed as a top 10 stock on March 28, 2024 in the market index Renewables Users because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for STMicroelectronics on March 28, 2024.
Snapshot: Obermatt Ranks
| Country | Switzerland |
| Industry | Semiconductors |
| Index | CAC 40, CAC All, SBF 120, Artificial Intelligence, Employee Focus EU, Energy Efficient, Low Waste, Renewables Users, Recycling |
| 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 STMicroelectronics Strong Buy
| 360 METRICS | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 85 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock STMicroelectronics are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for STMicroelectronics. The consolidated Value Rank has an attractive rank of 57, which means that the share price of STMicroelectronics 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 57% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 57, 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. The company is also safely financed with a Safety rank of 85. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 85. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, STMicroelectronics is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 57), above-average growth (Growth Rank of 57), safe financing practices (Safety Rank of 85), and a positive market sentiment in the professional investor community (Sentiment Rank of 85), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of STMicroelectronics is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for STMicroelectronics very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock STMicroelectronics is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for STMicroelectronics. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 59, which means that currently, professional investors hold more stock in this company than in 59% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 74 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 74% of competitors). But Analyst Opinions Change has a below-average rank of 47, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in STMicroelectronics. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), STMicroelectronics has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: STMicroelectronics Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), STMicroelectronics shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for STMicroelectronics. Price-to-Profit (also referred to as price-earnings, P/E) is 66 which means that the stock price compared with what market professionals expect for future profits is lower than for 66% of comparable companies, indicating a good value concerning STMicroelectronics'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 44, which means that the stock price is lower as regards to invested capital than for 44% of comparable investments. On the other hand, Price-to-Sales is less favorable than 62% of alternatives (only 38% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 50% 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 57, is a buy recommendation based on STMicroelectronics's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: STMicroelectronics Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), STMicroelectronics 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 STMicroelectronics. Sales Growth has a rank of 52 which means that currently, professionals expect the company to grow more than 52% of its competitors. Capital Growth is also above 19% of competitors with a rank of 88. But Profit Growth only has a rank of 19, which means that currently professionals expect the company to grow its profits less than 81% of its competitors. And Stock Returns have also been below average with a rank of only 49. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: STMicroelectronics Debt Financing Safety very solid
| SAFETY METRICS | March 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 70 |
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| REFINANCING | ||||||||
| REFINANCING | 48 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 85 |
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ANALYSIS: With an Obermatt Safety Rank of 85 (better than 85% compared with alternatives) for 2024, the company STMicroelectronics has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of STMicroelectronics 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, with two out of three indicators above average for STMicroelectronics. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 48, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 52% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 85 (better than 85% compared with alternatives), STMicroelectronics has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for STMicroelectronics. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: STMicroelectronics Top Financial Performance
| COMBINED PERFORMANCE | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), STMicroelectronics (Semiconductors, Switzerland) shares have much better financial characteristics than comparable stocks. Shares of STMicroelectronics are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 57), and are safely financed (Safety Rank of 85), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on STMicroelectronics's financial characteristics. As the company STMicroelectronics's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 57), above-average growth (Obermatt Growth Rank of 57), and indicate that the company is safely financed (Obermatt Safety Rank of 85), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of STMicroelectronics. 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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