June 29, 2023
Top 10 Stock Timken 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: Timken – Top 10 Stock in S&P Mid-Cap Index
Timken is listed as a top 10 stock on June 29, 2023 in the market index S&P MIDCAP because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for Timken on June 29, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Industrial Machinery |
| Index | S&P MIDCAP |
| 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 Timken Strong Buy
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Timken are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Timken. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Timken 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 94% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 59, 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 60. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 100. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, Timken is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 94), above-average growth (Growth Rank of 59), safe financing practices (Safety Rank of 60), and a positive market sentiment in the professional investor community (Sentiment Rank of 100), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Timken is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Timken very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Timken is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Timken. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 80, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Timken. The Professional Investors rank is 92, which means that currently, professional investors hold more stock in this company than in 92% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 91 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Timken has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Timken stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Timken Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2023, Timken shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Timken. Price-to-Sales is 74 which means that the stock price compared with what market professionals expect for future sales is lower than for 74% of comparable companies, indicating a good value for Timken's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 95% 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 73. Compared with other companies in the same industry, dividend yields of Timken are expected to be higher than for 74% of all competitors (a Dividend Yield rank of 74). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Timken'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 Timken based on its detailed value metrics.
Growth Strategy: Timken Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 59 (better than 59% compared with alternatives), Timken shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Timken. Profit Growth has a rank of 80, which means that currently professionals expect the company to grow its profits more than 80% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has a below the median rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Capital Growth also has a lower rank of 38. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 59, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Timken. ...read more
Safety Strategy: Timken Debt Financing Safety above-average
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 86 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 60 |
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ANALYSIS: With an Obermatt Safety Rank of 60 (better than 60% compared with alternatives), the company Timken 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 Timken 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 just one indicator above average for Timken and the other two below average. Refinancing is at 86, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 46, meaning the company generates less profit to service its debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 60 (better than 60% compared with alternatives), Timken has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Timken are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Timken Top Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 59 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| COMBINED | ||||||||
| COMBINED | 82 |
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ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Timken (Industrial Machinery, USA) shares have much better financial characteristics than comparable stocks. Shares of Timken are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives), show above-average growth (Growth Rank of 59), and are safely financed (Safety Rank of 60), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Timken's financial characteristics. As the company Timken's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 94), above-average growth (Obermatt Growth Rank of 59), and indicate that the company is safely financed (Obermatt Safety Rank of 60), 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 Timken. 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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