December 26, 2024
Top 10 Stock Toray 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: Toray – Top 10 Stock in Low Emission Leaders
Toray is listed as a top 10 stock on December 26, 2024 in the market index Low Emissions 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 76 (top 76% performer), Obermatt assesses an overall strong buy recommendation for Toray on December 26, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Commodity Chemicals |
| Index | TOPIX 100, Low Emissions, Energy Efficient, 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° View Toray Strong Buy
| 360 METRICS | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 23 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 100 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 29 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 98 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 76 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Toray are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Toray. The consolidated Growth Rank has a good rank of 100, 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 100% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 98, which means that professional investors are more optimistic about the stock than for 98% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 23, which means that the share price of Toray 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 77% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 29, which means that the company has a financing structure that is riskier than those of 71% 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 76, Toray is better positioned than 76% 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 100), and professional market sentiment is positive (Sentiment Rank of 98), 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 Toray very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Toray is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Toray. 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. Analyst Opinions Change is also positive with a rank of 92, 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 Toray. The Professional Investors rank is 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 64 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 64% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Toray 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 Toray 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: Toray Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 23 (worse than 77% compared with alternatives), Toray shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Toray. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than 58% of comparable companies, indicating a good value concerning to Toray's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 19, meaning that dividends are expected to be lower than for 81% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 61% of alternatives (only 39% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 70% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 23, is a sell recommendation based on Toray's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Toray could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Toray looks like an expensive investment today. ...read more
Growth Strategy: Toray Growth Momentum high
| GROWTH METRICS | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 54 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 96 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 88 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 100 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2024, Toray 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 four indicators above average for Toray. Sales Growth has a value of 54, which means that, currently, professionals expect the company to grow more than 54% of its competitors. The same is valid for Profit Growth with a value of 96 and for Capital Growth with 88. In addition, Stock Returns had an above-average rank value of 93, which means they have been higher than 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Toray exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Toray Debt Financing Safety below-average
| SAFETY METRICS | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 32 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 53 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 37 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 29 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company Toray has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Toray 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 just one indicator above average for Toray and the other two below average. Refinancing is at 53, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. But Leverage is high with a rank of 32, meaning the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. Liquidity is also on the riskier side with a rank of 37, meaning the company generates less profit to service its debt than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), Toray has a financing structure that is riskier 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 Toray 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: Toray Below-Average Financial Performance
| COMBINED PERFORMANCE | December 26, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 23 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 100 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 37 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 47 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% compared with investment alternatives), Toray (Commodity Chemicals, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Toray are low in value (priced high) with a consolidated Value Rank of 23 (worse than 77% of alternatives), and are riskily financed (Safety Rank of 29, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: A Combined Rank of 47, is a hold recommendation based on Toray's financial characteristics. As the company Toray shows low value with an Obermatt Value Rank of 23 (77% 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 100% of comparable companies (Obermatt Growth Rank is 100). 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 29 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 Toray, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.