April 11, 2024
Top 10 Stock BASF 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: BASF – Top 10 Stock in Deutscher Aktienindex DAX 40
BASF is listed as a top 10 stock on April 11, 2024 in the market index DAX 40 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for BASF on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Diversified Chemicals |
| Index | CDAX, DAX 40, EURO STOXX 50, Low Emissions, Dividends Europe, Energy Efficient, Diversity Europe, Human Rights, Water Efficiency |
| Size class | XX-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 BASF Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 65 |
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| SENTIMENT | ||||||||
| SENTIMENT | 76 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock BASF are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for BASF. The consolidated Value Rank has an attractive rank of 84, which means that the share price of BASF is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 84% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 65. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 76. But the consolidated Growth Rank has a low rank of 48, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 52 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 89, BASF is better positioned than 89% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 84), secure financing practices (Safety Rank of 65), and positive market sentiment in the professional investor community (Sentiment Rank of 76). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 48), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of BASF is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for BASF very positive
ANALYSIS: With an Obermatt Sentiment Rank of 76 (better than 76% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock BASF is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for BASF. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 74, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in BASF. Finally, the Professional Investors rank is 73, which means that currently, professional investors hold more stock in this company than in 73% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 76 (more positive than 76% compared with investment alternatives), BASF has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 45, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 55% of competitors). This could mean future risks and should make investors careful. Attention to negative news for BASF is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: BASF Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2024, BASF shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for BASF. 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 BASF's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 67% 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 59. Compared with other companies in the same industry, dividend yields of BASF are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a buy recommendation based on BASF'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 BASF based on its detailed value metrics.
Growth Strategy: BASF Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% compared with alternatives), BASF 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 BASF. Profit Growth has a rank of 67, which means that currently professionals expect the company to grow its profits more than 67% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has a below the median rank of 33, which means that, currently, professionals expect the company to grow less than 67% of its competitors, and Capital Growth also has a lower rank of 17. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold 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 BASF. ...read more
Safety Strategy: BASF Debt Financing Safety above-average
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 48 |
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| REFINANCING | ||||||||
| REFINANCING | 61 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 49 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 65 |
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ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company BASF has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of BASF 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 just one indicator above average for BASF and the other two below average. Refinancing is at 61, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 49, meaning the company generates less profit to service its debt than 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), BASF has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for BASF are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: BASF Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), BASF (Diversified Chemicals, Germany) shares have much better financial characteristics than comparable stocks. Shares of BASF are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives), are safely financed (Safety Rank of 65, which means low debt burdens), but show below-average growth (Growth Rank of 48). ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on BASF's financial characteristics. As the company BASF's key financial metrics exhibit good value (Obermatt Value Rank of 84) but low growth (Obermatt Growth Rank of 48) while being safely financed (Obermatt Safety Rank of 65), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 84% 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
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