This week, Obermatt takes a deep dive into the top 10 stocks listed on Switzerland's SMI index.The 20 companies comprising the SMI may represent the giants of the Swiss stock market, but our Obermatt 360° View ranking reveals some surprising insights.
Big Names, Middling Scores
While the SMI showcases major players, it doesn't necessarily highlight the most attractive investment opportunities. Our analysis shows that only four of the top 10 SMI stocks achieve an Obermatt 360° View rank over 50. Even more striking, only one of these market leaders, the one that ranked lowest on the list, has an Obermatt Value rank higher than 50.
Why is this?
The SMI comprises the top 20 Swiss companies by market capitalization. This metric combines a company’s stock price, the number of outstanding shares and the level of liquidity. This definition pushes highly-valued companies to the top. Essentially, if a company's stock price was significantly undervalued, it wouldn't be an SMI leader in the first place.
Richemont takes the crown in our rankings within the SMI top 10, while Roche, the largest company on the index, lands at number 10. This highlights the difference between absolute size and relative performance, a key factor in the Obermatt 360° View.
Because the SMI, with its focus on large-cap stocks, doesn't fully represent the Swiss market's diverse opportunities, we created the Obermatt Pearls Index (traded on the Swiss stock exchange) This index tracks 36 companies from both the SMI and the broader SPI, which includes small and mid-cap companies. Our selection criteria focus on overall quality and potential, not just size.
The companies at a glance:
- Richemont: A luxury goods holding company known for brands like Cartier, Montblanc, and Chloe.
- Swisscom: The leading telecommunications provider in Switzerland, offering mobile, broadband, and TV services.
- Alcon: A global medical company specializing in eye care products, including contact lenses, surgical equipment, and pharmaceuticals.
- Givaudan: A leading global manufacturer of flavors and fragrances, serving customers in the food, beverage, and perfume industries.
- Swiss Life: A major provider of life insurance, pensions, and financial solutions in Switzerland and internationally.
- Sonova: A global leader in hearing care solutions, offering hearing aids, cochlear implants, and wireless communication devices.
- Zurich Insurance: A multinational insurance company providing a wide range of insurance and risk management solutions.
- ABB: A global technology leader focused on electrification and automation, contributing to a more sustainable and resource-efficient future.
- Swiss Re: One of the world's largest reinsurers, helping insurance companies manage risk and cover large claims.
- Roche: A global healthcare company specializing in pharmaceuticals and diagnostics, with a focus on oncology, immunology, and infectious diseases.
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