June 1, 2023
Top 10 Stock Sumitomo Electric 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: Sumitomo Electric – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Sumitomo Electric is listed as a top 10 stock on June 01, 2023 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 85 (top 85% performer), Obermatt assesses an overall strong buy recommendation for Sumitomo Electric on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Auto Parts & Equipment |
| Index | TOPIX 100, Energy Efficient, Human Rights, Nikkei 225 |
| 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° Assessment Sumitomo Electric Strong Buy
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| SENTIMENT | ||||||||
| SENTIMENT | 42 |
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| 360° VIEW | ||||||||
| 360° VIEW | 85 |
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ANALYSIS: With an Obermatt 360° View of 85 (better than 85% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Sumitomo Electric are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Sumitomo Electric. The consolidated Value Rank has an attractive rank of 71, which means that the share price of Sumitomo Electric is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 71% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 79, 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 69. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 42. Professional investors are more confident in 58% other stocks. ...read more
RECOMMENDATION: With a 360° View of 85, Sumitomo Electric is better than 85% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 71), above-average growth (Growth Rank of 79) and an indication that the company is safely financed (Safety Rank of 69), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 42), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Sumitomo Electric is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Sumitomo Electric only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock Sumitomo Electric is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Sumitomo Electric. Analyst Opinions are at a rank of 55 (better than 55% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 52, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 52% of competitors). But Analyst Opinions Change is negative with a rank of 43, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Sumitomo Electric. There are also only so many institutional investors holding company stock with a Professional Investors rank of 38, which means that, currently, professional investors hold less stock in this company than in 62% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), Sumitomo Electric has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Sumitomo Electric Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Sumitomo Electric shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sumitomo Electric. Price-to-Sales has a value of 77 which means that the stock price compared with what market professionals expect for future sales is lower than for 77% of comparable companies, indicating a good value for Sumitomo Electric's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 60% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 72. Compared with other companies in the same industry, dividend yields of Sumitomo Electric are expected to be higher than for 67% of all competitors (a Dividend Yield rank of 67). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a BUY recommendation based on Sumitomo Electric's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Sumitomo Electric based on its detailed value metrics.
Growth Strategy: Sumitomo Electric Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2023, Sumitomo Electric 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 half of the indicators below and half above average for Sumitomo Electric. Capital Growth has a rank of 90, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 69 (above 69% of alternative investments). But Sales Growth has only a rank of 41, which means that, currently, professionals expect the company to grow less than 59% of its competitors, and Profit Growth is also low at a rank of 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, 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 Sumitomo Electric, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Sumitomo Electric Debt Financing Safety above-average
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 61 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 69 |
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ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company Sumitomo Electric 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 Sumitomo Electric 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 all three are above average for Sumitomo Electric. Leverage is at 61, meaning the company has a below-average debt-to-equity ratio. It has less debt than 61% of its competitors. Refinancing is at a rank of 59, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Finally, Liquidity is also good at a rank of 56, which means that the company generates more profit to service its debt than 56% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), Sumitomo Electric has a financing structure that is safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Sumitomo Electric Top Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 90 |
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ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Sumitomo Electric (Auto Parts & Equipment, Japan) shares have much better financial characteristics than comparable stocks. Shares of Sumitomo Electric are a good value (attractively priced) with a consolidated Obermatt Value Rank of 71 (better than 71% of alternatives), show above-average growth (Growth Rank of 79), and are safely financed (Safety Rank of 69), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 90, is a strong buy recommendation based on Sumitomo Electric's financial characteristics. As the company Sumitomo Electric's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 71), above-average growth (Obermatt Growth Rank of 79), and indicate that the company is safely financed (Obermatt Safety Rank of 69), 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 Sumitomo Electric. 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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