August 15, 2024
Top 10 Stock XL Axiata 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: XL Axiata – Top 10 Stock in Jakarta Composite Index IDX Composite
XL Axiata is listed as a top 10 stock on August 15, 2024 in the market index IDX Composite because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for XL Axiata on August 15, 2024.
Snapshot: Obermatt Ranks
| Country | Indonesia |
| Industry | Wireless Telecommunication |
| Index | Artificial Intelligence, IDX Composite |
| 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 XL Axiata Buy
| 360 METRICS | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 11 |
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| SENTIMENT | ||||||||
| SENTIMENT | 76 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock XL Axiata are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for XL Axiata. The consolidated Value Rank has an attractive rank of 58, which means that the share price of XL Axiata 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 58% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 65, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 76. But the company’s financing is risky with a Safety rank of 11. This means 89% of comparable companies have a safer financing structure than XL Axiata. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, XL Axiata is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 58), above-average growth (Growth Rank of 65), and positive market sentiment in the professional investor community (Sentiment Rank of 76), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 11), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of XL Axiata is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for XL Axiata very positive
ANALYSIS: With an Obermatt Sentiment Rank of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock XL Axiata is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for XL Axiata. Analyst Opinions are at a rank of 59 (better than 59% 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 64, 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 XL Axiata. The Professional Investors rank is 51, which means that currently, professional investors hold more stock in this company than in 51% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 87 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 87% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 76 (more positive than 76% compared with investment alternatives), XL Axiata 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 XL Axiata 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: XL Axiata Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), XL Axiata shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for XL Axiata. Price-to-Sales (P/S) 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 concerning XL Axiata's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 75% of alternatives (25% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 43 are lower than average (dividends are expected to be lower than 57% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 45, 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 58, is a buy recommendation based on XL Axiata's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for XL Axiata may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: XL Axiata Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), XL Axiata 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, where half of the indicators are below and half above average for XL Axiata. Profit Growth, with a rank of 78 (better than 78% of its competitors), and Capital Growth, with a rank of 60, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 43, which means that, currently, professionals expect the company to grow less than 57% of its competitors, and Stock Returns are at a rank of 40. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: XL Axiata Debt Financing Safety risky
| SAFETY METRICS | August 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 28 |
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| REFINANCING | ||||||||
| REFINANCING | 7 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
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ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company XL Axiata 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 XL Axiata 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 XL Axiata. Liquidity is at 26, meaning that the company generates less profit to service its debt than 74% 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 28, meaning the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. Finally, Refinancing is at a rank of 7 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 93% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), XL Axiata 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: XL Axiata Below-Average Financial Performance
| COMBINED PERFORMANCE | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| COMBINED | ||||||||
| COMBINED | 28 |
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ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% compared with investment alternatives), XL Axiata (Wireless Telecommunication, Indonesia) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of XL Axiata are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 28, is a hold recommendation based on XL Axiata's financial characteristics. As the company XL Axiata's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 58) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 11) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. 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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