Fact based stock research
Sumitomo Bakelite (TSE:4203)

JP3409400003

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Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

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Sumitomo Bakelite stock research in summary

sumibe.co.jp

ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Sumitomo Bakelite (Specialty Chemicals, Japan) shares have much better financial characteristics than comparable stocks. Shares of Sumitomo Bakelite are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives). But they show above-average growth (Growth Rank of 97) and are safely financed (Safety Rank of 79, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Sumitomo Bakelite's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Sumitomo Bakelite exhibits low value (Obermatt Value Rank of 33), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 97). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 79) 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). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	33
Growth Rank	97
Safety Rank	79
Combined Rank	92

Country	Japan
Industry	Specialty Chemicals
Index	Low Emissions
Size class	Large

2-May-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Sumitomo Bakelite

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	95	31	43	33
GROWTH
GROWTH	18	69	89	97
SAFETY
SAFETY	100	61	72	79
SENTIMENT
SENTIMENT	n/a	63	82	^new
360° VIEW
360° VIEW	n/a	63	90	^new

Most recent update of the stock research: 2-May-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Sumitomo Bakelite is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	95	31	43	33
GROWTH
GROWTH	18	69	89	97
SAFETY
SAFETY	100	61	72	79
COMBINED
COMBINED	100	57	82	92

Last update of combined financial performance: 2-May-2024. Stock analysis on combined financial performance: The higher the rank of Sumitomo Bakelite the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Sumitomo Bakelite 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 below average for Sumitomo Bakelite. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 54, which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning Sumitomo Bakelite's profit levels. But Price-to-Sales is 32 which means that the stock price compared with what market professionals expect for future profits is higher than for 68% of comparable companies, indicating a low value concerning Sumitomo Bakelite'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 26 and for dividend yield, which is lower than for 70% 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 33, is a hold recommendation based on Sumitomo Bakelite'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 Sumitomo Bakelite 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. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	84	39	36	32
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	90	35	64	54
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	88	51	37	26
DIVIDEND YIELD
DIVIDEND YIELD	82	46	28	30
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	95	31	43	33

Last update of Value Rank: 2-May-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Sumitomo Bakelite; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, Sumitomo Bakelite 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 Sumitomo Bakelite. Sales Growth has a value of 72, which means that, currently, professionals expect the company to grow more than 72% of its competitors. The same is valid for Profit Growth with a value of 51 and for Capital Growth with 58. In addition, Stock Returns had an above-average rank value of 99, which means they have been higher than 99% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Sumitomo Bakelite 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. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	14	51	65	72
PROFIT GROWTH
PROFIT GROWTH	79	47	67	51
CAPITAL GROWTH
CAPITAL GROWTH	n/a	19	49	58
STOCK RETURNS
STOCK RETURNS	86	95	99	99
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	18	69	89	97

Last update of Growth Rank: 2-May-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Sumitomo Bakelite.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2024, the company Sumitomo Bakelite has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Sumitomo Bakelite 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 Sumitomo Bakelite. Leverage is at a rank of 73, meaning the company has a below-average debt-to-equity ratio. It has less debt than 73% 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 43, 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 57% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), Sumitomo Bakelite 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 Sumitomo Bakelite. 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. Investors may have a short-term debt challenge with Sumitomo Bakelite and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	84	50	74	73
REFINANCING
REFINANCING	80	53	49	43
LIQUIDITY
LIQUIDITY	100	67	84	84
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	61	72	79

Last update of Safety Rank: 2-May-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Sumitomo Bakelite and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	76	81	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	4	9	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	70	100	^new
MARKET PULSE
MARKET PULSE	n/a	50	68	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	63	82	^new

Last update of Sentiment Rank: 2-May-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Sumitomo Bakelite.
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