August 1, 2024
Top 10 Stock Akzo Nobel Sell 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: Akzo Nobel – Top 10 Stock in AEX Index
Akzo Nobel is listed as a top 10 stock on August 01, 2024 in the market index AEX because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 13 (13% performer), Obermatt issues an overall sell recommendation for Akzo Nobel on August 01, 2024.
Snapshot: Obermatt Ranks
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 Akzo Nobel Sell
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| SENTIMENT | ||||||||
| SENTIMENT | 45 |
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| 360° VIEW | ||||||||
| 360° VIEW | 13 |
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ANALYSIS: With an Obermatt 360° View of 13 (better than 13% compared with alternatives), overall professional sentiment and financial characteristics for the stock Akzo Nobel are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Akzo Nobel. Only the consolidated Value Rank has an attractive rank of 58, which means that the share price of Akzo Nobel is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 58% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 25, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 8, meaning the company has a riskier financing structure than 92% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 55% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 45. ...read more
RECOMMENDATION: With a consolidated 360° View of 13, Akzo Nobel is worse than 87% of all alternative stock investment opportunities based on the Obermatt Method. This means that Akzo Nobel shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 58. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 25), a riskier financing structure than the competition (Safety Rank of 8), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 45) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Akzo Nobel is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Akzo Nobel. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Akzo Nobel only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 45 (better than 45% compared with alternatives), overall professional sentiment and engagement for the stock Akzo Nobel is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Akzo Nobel. Analyst Opinions are at a rank of 42 (worse than 58% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 17, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 59, which means that professional investors hold more stock in this company than in 59% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 71, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 71% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Akzo Nobel and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 45 (less encouraging than 55% compared with investment alternatives), Akzo Nobel has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Akzo Nobel Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Akzo Nobel shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Akzo Nobel. Price-to-Profit (also referred to as price-earnings, P/E) is 57 which means that the stock price compared with what market professionals expect for future profits is lower than for 57% of comparable companies, indicating a good value concerning Akzo Nobel's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 45, which means that the stock price is lower as regards to invested capital than for 45% of comparable investments. On the other hand, Price-to-Sales is less favorable than 58% of alternatives (only 42% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 28% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a buy recommendation based on Akzo Nobel's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Akzo Nobel Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Akzo Nobel shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Akzo Nobel. While Profit Growth has a good rank of 71, as professionals currently expect the company to grow its profits more than 71% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 11, which means that currently professionals expect the company to grow less than 89% of its competitors, while Capital Growth has a rank of 40 and Stock Returns have been below market median, with a rank of 37 (63% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Akzo Nobel Debt Financing Safety risky
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 11 |
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| REFINANCING | ||||||||
| REFINANCING | 14 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 8 |
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ANALYSIS: With an Obermatt Safety Rank of 8 (better than 8% compared with alternatives), the company Akzo Nobel 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 Akzo Nobel 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 Akzo Nobel. Liquidity is at 44, meaning that the company generates less profit to service its debt than 56% 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 11, meaning the company has an above-average debt-to-equity ratio. It has more debt than 89% of its competitors. Finally, Refinancing is at a rank of 14 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 86% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 8 (worse than 92% compared with alternatives), Akzo Nobel 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: Akzo Nobel Lowest Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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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), Akzo Nobel (Specialty Chemicals, Netherlands) shares have lower financial characteristics compared with similar stocks. Shares of Akzo Nobel are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives) but show below-average growth (Growth Rank of 25), and are riskily financed (Safety Rank of 8), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Akzo Nobel's financial characteristics. As the company Akzo Nobel's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 25) and risky financing practices (Obermatt Safety Rank of 8), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 58% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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