October 3, 2024
Top 10 Stock Arkema Strong 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: Arkema – Top 10 Stock in Société des Bourses Françaises Index SBF 120
Arkema is listed as a top 10 stock on October 03, 2024 in the market index SBF 120 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for Arkema on October 03, 2024.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Specialty Chemicals |
| Index | CAC All, SBF 120, Low Emissions, Dividends Europe, Energy Efficient, Diversity Europe, Human Rights |
| 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 Arkema Strong Buy
| 360 METRICS | October 3, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 92 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 40 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 84 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 46 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 86 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Arkema are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Arkema. The consolidated Value Rank has an attractive rank of 92, which means that the share price of Arkema is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 92% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 84. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 46. Professional investors are more confident in 54% other stocks. The consolidated Growth Rank also has a low rank of 40, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 60 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, Arkema is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 92), and the financing structure is on the safer side (Safety Rank of 84). However, sentiment in the professional investor community is below-average (Sentiment Rank of 46), as is the growth momentum for the company (Growth Rank of 40). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Arkema only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 46 (better than 46% compared with alternatives), overall professional sentiment and engagement for the stock Arkema is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Arkema. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 67, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 67% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 14, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Arkema. There are also only so many institutional investors holding company stock with a Professional Investors rank of 22, which means that, currently, professional investors hold less stock in this company than in 78% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 46 (less encouraging than 54% compared with investment alternatives), Arkema has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Arkema Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 92 (better than 92% compared with alternatives) for 2024, Arkema shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Arkema. Price-to-Sales is 63 which means that the stock price compared with what market professionals expect for future sales is lower than for 63% of comparable companies, indicating a good value for Arkema's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 92% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 77. Compared with other companies in the same industry, dividend yields of Arkema are expected to be higher than for 80% of all competitors (a Dividend Yield rank of 80). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 92, is a buy recommendation based on Arkema's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Arkema based on its detailed value metrics.
Growth Strategy: Arkema Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 40 (better than 40% compared with alternatives), Arkema 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 half of the indicators below and half above average for Arkema. Sales Growth has a rank of 57 which means that currently professionals expect the company to grow more than 57% of its competitors. Stock Returns are also above average with a rank of 51. But Capital Growth has only a rank of 26, which means that currently professionals expect the company to grow its invested capital less than 74% of its competitors. Profit Growth is also low, with a rank of only 46, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 40, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 51% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Arkema Debt Financing Safety very solid
| SAFETY METRICS | October 3, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 43 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 64 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 84 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 84 (better than 84% compared with alternatives) for 2024, the company Arkema has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Arkema is safe, it only means that the company is on the safer side regarding possible bankruptcy, 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 Arkema. Refinancing is at 64, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Liquidity is also good at 94, meaning the company generates more profit to service its debt than 94% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 43, which means the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 84 (better than 84% compared with alternatives), Arkema has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Arkema could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Arkema Top Financial Performance
| COMBINED PERFORMANCE | October 3, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 92 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 40 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 90 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Arkema (Specialty Chemicals, France) shares have much better financial characteristics than comparable stocks. Shares of Arkema are a good value (attractively priced) with a consolidated Value Rank of 92 (better than 92% of alternatives), are safely financed (Safety Rank of 84, which means low debt burdens), but show below-average growth (Growth Rank of 40). ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on Arkema's financial characteristics. As the company Arkema's key financial metrics exhibit good value (Obermatt Value Rank of 92) but low growth (Obermatt Growth Rank of 40) while being safely financed (Obermatt Safety Rank of 84), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 92% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.