Quick Facts
- VAT Group AG is the most recent addition to the OMSP1. At the same time, LEM was removed from the portfolio.
- A Swiss company that produces high-performance vacuum valves and systems.
Pros
- Strong Growth Rank: Analysts predict a strong 21.2% annual earnings increase over the next three years. ✔
- Almost no competition: This position grants them pricing power and potentially shields them from disruptive competition. ✔
- VAT Group is a prominent Swiss manufacturer with a global presence (3,000 employees and production plants in 3 countries). ✔
Cons
- Low Value Rank. ❌
- New Leadership: Urs Gantner's recent appointment as CEO in January 2024. ❌
- Nearly half (48%) of VAT Group is owned by institutional investors and the top 25 shareholders, which leads to higher price volatility. ❌
Obermatt Ranks
VAT Group, a prominent Swiss manufacturer of high-performance vacuum valves and systems, has been incorporated into the OMSP1 portfolio. VAT Group, a global player with approximately 3,000 employees, boasts production plants in three countries, solidifying its position as a leader in the industry. Their expertise in a critical industrial sector positions them as a valuable addition to the index.
At the same time, LEM Holdings was removed from the OMSP1 portfolio. The 360° View score assigned to LEM at the time of analysis was 7.
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Analysts' forecasts paint a promising picture for VAT Group's future. Industry experts anticipate VAT Group's earnings to increase by a substantial 21.2% annually over the next three years. This projected growth significantly outperforms the broader Swiss market, which is expected to see average annual earnings growth of only 8.4%. VAT Group's high Obermatt Growth Rank (97) further reinforces this optimistic outlook.
VAT Group operates in a niche market with relatively few direct competitors. This limited competition can be viewed as a positive factor, as it grants VAT Group a certain degree of pricing power and potentially insulates them from disruptive competition. However, it's also important to acknowledge the inherent risks associated with a somewhat monopolistic position, such as potential regulatory scrutiny or unforeseen technological advancements that could erode their market share.
It is worth acknowledging that VAT Group recently underwent an internal leadership change. Urs Gantner was appointed CEO in January 2024. Previously, he was Executive Vice President of VAT’s Semiconductor business. As his tenure is currently less than half a year, the long-term impact of his management style on the company's performance remains to be seen. We will closely monitor VAT Group's development under this new leadership.
Another factor to consider is VAT Group's ownership structure. Institutional investors and the top 25 shareholders collectively hold a significant stake of approximately 48% in the company. This concentrated ownership can lead to higher volatility in the stock price, as these large investors have the potential to influence market sentiment through their buying and selling activities.
Each month, we evaluate the OMSP1 portfolio to make sure that it reflects the evolving Swiss economic landscape. Companies that demonstrate strong fundamentals, promising growth trajectories, and a positive contribution to the overall Swiss business environment displayed in their Obermatt 360° View are being added, while the worst performing ones are removed.