July 27, 2023
Top 10 Stock Thomson Reuters 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: Thomson Reuters – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
Thomson Reuters is listed as a top 10 stock on July 27, 2023 in the market index TSX Composite 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 62 (high 62% performer), Obermatt assesses an overall buy recommendation for Thomson Reuters on July 27, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Research & Consulting |
| Index | Dividends USA, TSX Composite |
| Size class | X-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 Thomson Reuters Buy
| 360 METRICS | July 27, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 62 |
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ANALYSIS: With an Obermatt 360° View of 62 (better than 62% compared with alternatives), overall professional sentiment and financial characteristics for the stock Thomson Reuters are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Thomson Reuters. The consolidated Value Rank has an attractive rank of 78, which means that the share price of Thomson Reuters 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 78% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 71. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 38. Professional investors are more confident in 62% other stocks. The consolidated Growth Rank also has a low rank of 19, 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. 81 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 62, Thomson Reuters is better positioned than 62% 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 78), and the financing structure is on the safer side (Safety Rank of 71). However, sentiment in the professional investor community is below-average (Sentiment Rank of 38), as is the growth momentum for the company (Growth Rank of 19). 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 Thomson Reuters only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Thomson Reuters is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Thomson Reuters. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 16, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 57, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 57% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Thomson Reuters and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Thomson Reuters has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Thomson Reuters Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% compared with alternatives) for 2023, Thomson Reuters shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Thomson Reuters. Price-to-Profit (also referred to as price-earnings, P/E) is 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 Thomson Reuters'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 40, which means that the stock price is lower as regards to invested capital than for 40% of comparable investments. On the other hand, Price-to-Sales is less favorable than 83% of alternatives (only 17% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 0% 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 78, is a buy recommendation based on Thomson Reuters'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: Thomson Reuters Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Thomson Reuters 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 Thomson Reuters. Sales Growth has a below market rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors. The same is valid for Capital Growth, with a rank of 14, and Profit Growth, with a rank of 42. Currently, professionals expect the company to grow its profits less than 58% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 69, which means that the stock returns have recently been above 69% 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 Thomson Reuters, 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: Thomson Reuters Debt Financing Safety above-average
| SAFETY METRICS | July 27, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 51 |
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| REFINANCING | ||||||||
| REFINANCING | 21 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 71 |
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ANALYSIS: With an Obermatt Safety Rank of 71 (better than 71% compared with alternatives), the company Thomson Reuters 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 Thomson Reuters 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 Thomson Reuters. Leverage is at a rank of 51, meaning the company has a below-average debt-to-equity ratio. It has less debt than 51% of its competitors. Liquidity is also good at a rank of 90, meaning the company generates more profit to service its debt than 90% 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 21, 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 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 71 (better than 71% compared with alternatives), Thomson Reuters has a financing structure that is 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 Thomson Reuters. 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: Thomson Reuters Above-Average Financial Performance
| COMBINED PERFORMANCE | July 27, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Thomson Reuters (Research & Consulting, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Thomson Reuters are a good value (attractively priced) with a consolidated Value Rank of 78 (better than 78% of alternatives), are safely financed (Safety Rank of 71, which means low debt burdens), but show below-average growth (Growth Rank of 19). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Thomson Reuters's financial characteristics. As the company Thomson Reuters's key financial metrics exhibit good value (Obermatt Value Rank of 78) but low growth (Obermatt Growth Rank of 19) while being safely financed (Obermatt Safety Rank of 71), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 78% 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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