August 1, 2024
Top 10 Stock West Fraser 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: West Fraser – Top 10 Stock in Wood & Timber Industry
West Fraser is listed as a top 10 stock on August 01, 2024 in the market index Timber Industry 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 88 (top 88% performer), Obermatt assesses an overall strong buy recommendation for West Fraser on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Forest Products |
| Index | Low Waste, Recycling, Timber Industry, 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 West Fraser Strong Buy
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| SENTIMENT | ||||||||
| SENTIMENT | 52 |
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| 360° VIEW | ||||||||
| 360° VIEW | 88 |
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ANALYSIS: With an Obermatt 360° View of 88 (better than 88% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock West Fraser are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for West Fraser. The consolidated Value Rank has an attractive rank of 67, which means that the share price of West Fraser 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 67% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 79, 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 69. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 52. ...read more
RECOMMENDATION: With a consolidated 360° View of 88, West Fraser is better positioned than 88% 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 67), above-average growth (Growth Rank of 79), safe financing practices (Safety Rank of 69), and a positive market sentiment in the professional investor community (Sentiment Rank of 52), 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 West Fraser 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 West Fraser positive
ANALYSIS: With an Obermatt Sentiment Rank of 52 (better than 52% compared with alternatives), overall professional sentiment and engagement for the stock West Fraser is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for West Fraser. Analyst Opinions are at a rank of 95 (better than 95% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 5, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in West Fraser. The Professional Investors rank is also low at 42, meaning that professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 49, which means that the current professional news and professional social networks are critical of this company (more negative news than for 51% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 52 (more positive than 52% compared with investment alternatives), West Fraser has a reputation among professional investors that is above-average compared with that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: West Fraser Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), West Fraser shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for West Fraser. Price-to-Sales (P/S) is 52 which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value for West Fraser's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 83. Finally, compared with other companies in the same industry, dividend yields of West Fraser are expected to be higher than for 70% of all competitors (a Dividend Yield rank of 70). The only low rank is for expected profits with a Price-to-Profit Rank of 35, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on West Fraser's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: West Fraser Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 79 (better than 79% compared with alternatives) for 2024, West Fraser 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 West Fraser. Sales Growth has a rank of 81 which means that currently, professionals expect the company to grow more than 81% of its competitors. Both Profit Growth, with a rank of 100, and Stock Returns, with a rank of 52, are also above average. But Capital Growth only has a rank of 28, which means that, currently, professionals expect the company to grow its invested capital less than 72% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: West Fraser Debt Financing Safety above-average
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 98 |
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| REFINANCING | ||||||||
| REFINANCING | 53 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 19 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 69 |
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ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company West Fraser 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 West Fraser 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 where two out of three are above average for West Fraser.Leverage is at 98, meaning the company has a below-average debt-to-equity ratio. It has less debt than 98% of its competitors.Refinancing is at a rank of 53, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Liquidity is at 19, meaning that the company generates less profit to service its debt than 81% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 69 (better than 69% compared with alternatives), West Fraser has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: West Fraser Top Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 19 |
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| COMBINED | ||||||||
| COMBINED | 90 |
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ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), West Fraser (Forest Products, Canada) shares have much better financial characteristics than comparable stocks. Shares of West Fraser are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives), show above-average growth (Growth Rank of 79), and are safely financed (Safety Rank of 69), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on West Fraser's financial characteristics. As the company West Fraser's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 67), above-average growth (Obermatt Growth Rank of 79), and indicate that the company is safely financed (Obermatt Safety Rank of 69), 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 West Fraser. 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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