October 31, 2024
Top 10 Stock Sunway 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: Sunway – Top 10 Stock in Real Estate in Growth Markets
Sunway is listed as a top 10 stock on October 31, 2024 in the market index R/E Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for Sunway on October 31, 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 Buy
| 360 METRICS | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 60 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sunway are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Sunway. The consolidated Growth Rank has a good rank of 95, 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. This means that growth is higher than for 95% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 60, which means that professional investors are more optimistic about the stock than for 60% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 41, which means that the share price of Sunway is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 59% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 14, which means that the company has a financing structure that is riskier than those of 86% 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 51, Sunway is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 95), and professional market sentiment is positive (Sentiment Rank of 60), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Sunway positive
ANALYSIS: With an Obermatt Sentiment Rank of 60 (better than 60% compared with alternatives), overall professional sentiment and engagement for the stock Sunway is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Sunway. Analyst Opinions are at a rank of 52 (better than 52% 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 93, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 93% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 33, 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 Sunway. There are also only so many institutional investors holding company stock with a Professional Investors rank of 28, which means that, currently, professional investors hold less stock in this company than in 72% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 60 (more positive than 60% compared with investment alternatives), Sunway has a reputation among professional investors that is above-average compared with 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: Sunway Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Sunway shares are more expensive than the average comparable stock. 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 65% of comparable companies (a Dividend Yield rank of 65), 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 63, which means that the stock price is lower compared with invested capital than for 63% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than for 66% 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 39. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 61% of comparable companies, indicating a low value concerning Sunway's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold 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 high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Sunway 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 but one indicator above average for Sunway. Sales Growth has a rank of 69 which means that currently, professionals expect the company to grow more than 69% of its competitors. Capital Growth is also above 45% of competitors with a rank of 95, and Stock Returns with the rank of 97 is also an outperformance. Only Profit Growth is low with a rank of 45 which means that currently, professionals expect the company to grow its profits less than 55% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Sunway is a good growth stock. ...read more
Safety Strategy: Sunway Debt Financing Safety risky
| SAFETY METRICS | October 31, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 40 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% 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 27, meaning that the company generates less profit to service its debt than 73% 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 40, meaning the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. Finally, Refinancing is at a rank of 25 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% 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 Below-Average Financial Performance
| COMBINED PERFORMANCE | October 31, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Sunway (Industrial Conglomerates, Malaysia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Sunway are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), and are riskily financed (Safety Rank of 14, which means above-average debt burdens) but show above-average growth (Growth Rank of 95). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Sunway's financial characteristics. As the company Sunway shows low value with an Obermatt Value Rank of 41 (59% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 95% of comparable companies (Obermatt Growth Rank is 95). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 14 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Sunway, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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