October 31, 2024
Top 10 Stock STMicroelectronics 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 Cotation Assistée en Continu Index CAC 40
STMicroelectronics is listed as a top 10 stock on October 31, 2024 in the market index CAC 40 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 53 (high 53% performer), Obermatt assesses an overall buy recommendation for STMicroelectronics on October 31, 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 Buy
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 18 |
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| SAFETY | ||||||||
| SAFETY | 81 |
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| SENTIMENT | ||||||||
| SENTIMENT | 43 |
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| 360° VIEW | ||||||||
| 360° VIEW | 53 |
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ANALYSIS: With an Obermatt 360° View of 53 (better than 53% compared with alternatives), overall professional sentiment and financial characteristics for the stock STMicroelectronics are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for STMicroelectronics. The consolidated Value Rank has an attractive rank of 58, 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 58% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 81. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 43. Professional investors are more confident in 57% other stocks. The consolidated Growth Rank also has a low rank of 18, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 82 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 53, STMicroelectronics is better positioned than 53% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 58), and the financing structure is on the safer side (Safety Rank of 81). However, sentiment in the professional investor community is below-average (Sentiment Rank of 43), as is the growth momentum for the company (Growth Rank of 18). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for STMicroelectronics only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock STMicroelectronics is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for STMicroelectronics. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 59 which means that currently, professional investors hold more stock in this company than in 59% of alternative investment opportunities. But Analyst Opinions Change has a rank of 18, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in STMicroelectronics. Furthermore, Market Pulse has a rank of 31, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 69% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), STMicroelectronics has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a 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 may be around the corner. ...read more
Value Strategy: STMicroelectronics Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% 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 57 which means that the stock price compared with what market professionals expect for future profits is lower than for 57% 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 43, which means that the stock price is lower as regards to invested capital than for 43% of comparable investments. On the other hand, Price-to-Sales is less favorable than 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 29% 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 58, 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 negative
ANALYSIS: With an Obermatt Growth Rank of 18 (better than 18% compared with alternatives), STMicroelectronics shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for STMicroelectronics. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors. The same is valid for Profit Growth, with a rank of 15, and Capital Growth with 34. In addition, Stock Returns have a below market rank of 45, which means that the stock returns have recently been below 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 18, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: STMicroelectronics Debt Financing Safety very solid
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 69 |
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| REFINANCING | ||||||||
| REFINANCING | 49 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 81 |
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ANALYSIS: With an Obermatt Safety Rank of 81 (better than 81% 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 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% 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 49, 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 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 81 (better than 81% 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 18 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 51 |
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ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), STMicroelectronics (Semiconductors, Switzerland) shares have above-average financial characteristics compared with similar stocks. Shares of STMicroelectronics are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives), are safely financed (Safety Rank of 81, which means low debt burdens), but show below-average growth (Growth Rank of 18). ...read more
RECOMMENDATION: A Combined Rank of 51, is a buy recommendation based on STMicroelectronics's financial characteristics. As the company STMicroelectronics's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 18) while being safely financed (Obermatt Safety Rank of 81), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 58% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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