November 14, 2024
Top 10 Stock Alfa Laval 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: Alfa Laval – Top 10 Stock in Optionsmäklarna Stockholm Stock Exchange Stockholm Index OMX 30
Alfa Laval is listed as a top 10 stock on November 14, 2024 in the market index OMX 30 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for Alfa Laval on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Industrial Machinery |
| Index | Human Rights, Water Tech, OMX 30 |
| Size class | X-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 Alfa Laval Buy
| 360 METRICS | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| SENTIMENT | ||||||||
| SENTIMENT | 66 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock Alfa Laval are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Alfa Laval. The consolidated Growth Rank has a good rank of 69, 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. This means that growth is higher than for 69% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 66, which means that professional investors are more optimistic about the stock than for 66% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 14, which means that the share price of Alfa Laval is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 86% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 44, which means that the company has a financing structure that is riskier than those of 56% 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 51, Alfa Laval is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 69), and professional market sentiment is positive (Sentiment Rank of 66), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Alfa Laval positive
ANALYSIS: With an Obermatt Sentiment Rank of 66 (better than 66% compared with alternatives), overall professional sentiment and engagement for the stock Alfa Laval is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Alfa Laval. Analyst Opinions are at a rank of 13 (worse than 87% 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 45, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 77, which means that professional investors hold more stock in this company than in 77% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 90, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 90% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Alfa Laval and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 66 (more positive than 66% compared with investment alternatives), Alfa Laval has a reputation among professional investors that is above-average compared with 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: Alfa Laval Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 14 (worse than 86% compared with alternatives), Alfa Laval 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 Alfa Laval. Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than 85% of comparable companies, indicating a low value concerning Alfa Laval's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 25, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Alfa Laval. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 22 and Dividend Yield, which is lower than 67% 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 14, is a sell recommendation based on Alfa Laval's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Alfa Laval? 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 Alfa Laval? 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. Alfa Laval 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: Alfa Laval Growth Momentum good
| GROWTH METRICS | November 14, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 82 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 62 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 34 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 73 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 69 |
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ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Alfa Laval 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, with all but one indicator above average for Alfa Laval. Sales Growth has a rank of 82 which means that currently, professionals expect the company to grow more than 82% of its competitors. Both Profit Growth, with a rank of 62, and Stock Returns, with a rank of 73, are also above average. But Capital Growth only has a rank of 34, which means that, currently, professionals expect the company to grow its invested capital less than 66% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Alfa Laval Debt Financing Safety below-average
| SAFETY METRICS | November 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 16 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 68 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 44 |
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ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% compared with alternatives), the company Alfa Laval 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 Alfa Laval 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 two out of three indicators above average for Alfa Laval. Leverage is at a rank of 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors. Liquidity is also good at a rank of 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 16, 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 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% compared with alternatives), Alfa Laval has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Alfa Laval. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Alfa Laval Below-Average Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 68 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Alfa Laval (Industrial Machinery, Sweden) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Alfa Laval are low in value (priced high) with a consolidated Value Rank of 14 (worse than 86% of alternatives), and are riskily financed (Safety Rank of 44, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Alfa Laval's financial characteristics. As the company Alfa Laval shows low value with an Obermatt Value Rank of 14 (86% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 69% of comparable companies (Obermatt Growth Rank is 69). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 44 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Alfa Laval, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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