March 21, 2024
Top 10 Stock Sunway Hold 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: Sunway – Top 10 Stock in Real Estate in Growth Markets
Sunway is listed as a top 10 stock on March 21, 2024 in the market index R/E Growth Markets because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 39 (39% performer), Obermatt assesses an overall hold recommendation for Sunway on March 21, 2024.
Snapshot: Obermatt Ranks
| Country | Malaysia |
| Industry | Industrial Conglomerates |
| Index | Energy Efficient, Human Rights, Independent Boards Growth Markets, Low Waste, R/E Growth Markets |
| Size class | 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 Sunway Hold
| 360 METRICS | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 12 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 39 |
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ANALYSIS: With an Obermatt 360° View of 39 (better than 39% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sunway are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sunway. The consolidated Value Rank has an attractive rank of 53, which means that the share price of Sunway is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 53% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 92, which means that professional investors are more optimistic about the stock than for 92% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 19, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 12, meaning the company has a riskier financing structure than 88 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 39, Sunway is worse than 61% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 53) and positive market sentiment in the professional investor community (Sentiment Rank of 92), but growth expectations are below-average (Growth Rank of 19) and the financing structure is on the risky side(Safety Rank of 12). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Sunway is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Sunway very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Sunway is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Sunway. Analyst Opinions are at a rank of 93 (better than 93% 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 58, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 95, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 95% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 46, which means that currently, professional investors hold less stock in this company than in 54% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Sunway has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Sunway 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 Sunway. ...read more
Value Strategy: Sunway Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Sunway 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 Sunway. Expected dividend yields are higher than for 71% of comparable companies (a Dividend Yield rank of 71), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 88, which means that the stock price is lower compared with invested capital than for 88% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than for 62% of comparable companies, indicating a low value concerning Sunway's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Sunway with a rank of 49. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 51% of comparable companies, indicating a low value concerning Sunway's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Sunway's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Sunway may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Sunway Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Sunway 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 three out of four indicators below average for Sunway. Sales Growth has a below market rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors. The same is valid for Capital Growth, with a rank of 10, and Profit Growth, with a rank of 22. Currently, professionals expect the company to grow its profits less than 78% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 97, which means that the stock returns have recently been above 97% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Sunway, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Sunway Debt Financing Safety risky
| SAFETY METRICS | March 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 41 |
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| REFINANCING | ||||||||
| REFINANCING | 24 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 11 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 12 |
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ANALYSIS: With an Obermatt Safety Rank of 12 (better than 12% compared with alternatives), the company Sunway has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Sunway is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Sunway. Liquidity is at 11, meaning that the company generates less profit to service its debt than 89% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 41, meaning the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. Finally, Refinancing is at a rank of 24 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 12 (worse than 88% compared with alternatives), Sunway has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Sunway Lowest Financial Performance
| COMBINED PERFORMANCE | March 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 11 |
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| COMBINED | ||||||||
| COMBINED | 8 |
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ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Sunway (Industrial Conglomerates, Malaysia) shares have lower financial characteristics compared with similar stocks. Shares of Sunway are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives) but show below-average growth (Growth Rank of 19), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Sunway's financial characteristics. As the company Sunway's key financial metrics exhibit good value (Obermatt Value Rank of 53) but low growth (Obermatt Growth Rank of 19) and risky financing practices (Obermatt Safety Rank of 12), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 53% of comparable companies, may indicate 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. ...read more
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