March 28, 2024
Top 10 Stock Addtech Hold 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: Addtech – Top 10 Stock in Renewable Energy Use Leaders
Addtech is listed as a top 10 stock on March 28, 2024 in the market index Renewables Users because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 39 (39% performer), Obermatt assesses an overall hold recommendation for Addtech on March 28, 2024.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Trading & Distribution |
| Index | Renewables Users |
| 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 Addtech Hold
| 360 METRICS | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| SENTIMENT | ||||||||
| SENTIMENT | 98 |
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| 360° VIEW | ||||||||
| 360° VIEW | 39 |
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ANALYSIS: With an Obermatt 360° View of 39 (better than 39% compared with alternatives), overall professional sentiment and financial characteristics for the stock Addtech are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Addtech. The consolidated Sentiment Rank 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 all other ranks are below average. The consolidated Value Rank has a rank of 11, which means that the share price of Addtech is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 20, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 20% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 46 which means that the company has a riskier financing structure than 54% 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 39, Addtech is worse than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 98) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Addtecḥ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Addtech 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 Addtech is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Addtech. Analyst Opinions are at a rank of 9 (worse than 91% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 82, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Addtech. Even better, the Professional Investors rank is 100, meaning that professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 91, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Addtech has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Addtech Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Addtech shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Addtech. Price-to-Sales is 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Addtech's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 1, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Addtech. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 10 and Dividend Yield, which is lower than 66% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on Addtech's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Addtech? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Addtech? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Addtech may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Addtech Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Addtech shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Addtech. Profit Growth has a rank of 61, which means that currently professionals expect the company to grow its profits more than 61% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 75 (above 75% of alternative investments). But Sales Growth has a below the median rank of 8, which means that, currently, professionals expect the company to grow less than 92% of its competitors, and Capital Growth also has a lower rank of 31. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Addtech. ...read more
Safety Strategy: Addtech Debt Financing Safety below-average
| SAFETY METRICS | March 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 28 |
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| REFINANCING | ||||||||
| REFINANCING | 30 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 75 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company Addtech 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 Addtech 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 Addtech. Liquidity is at 75, meaning the company generates more profit to service its debt than 75% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 30, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 70% of its competitors. Leverage is also high at a rank of 28, which means that the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Addtech has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Addtech Lowest Financial Performance
| COMBINED PERFORMANCE | March 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 11 |
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| GROWTH | ||||||||
| GROWTH | 20 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| COMBINED | ||||||||
| COMBINED | 4 |
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ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Addtech (Trading & Distribution, Sweden) shares have lower financial characteristics compared with similar stocks. Shares of Addtech are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives), show below-average growth (Growth Rank of 20), and are riskily financed (Safety Rank of 46), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Addtech's financial characteristics. As the company Addtech's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 11), low growth (Obermatt Growth Rank of 20), and risky financing practices (Obermatt Safety Rank of 46), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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