February 22, 2024
Top 10 Stock Chr. Hansen 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: Chr. Hansen – Top 10 Stock in SDG 2: Zero Hunger
Chr. Hansen is listed as a top 10 stock on February 22, 2024 in the market index SDG 2 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 26 (26% performer), Obermatt assesses an overall hold recommendation for Chr. Hansen on February 22, 2024.
Snapshot: Obermatt Ranks
| Country | Denmark |
| Industry | Specialty Chemicals |
| Index | OMX C20, Diversity Europe, Renewables Users, SDG 12, SDG 2, SDG 3 |
| 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 Chr. Hansen Hold
| 360 METRICS | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 10 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 76 |
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| 360° VIEW | ||||||||
| 360° VIEW | 26 |
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ANALYSIS: With an Obermatt 360° View of 26 (better than 26% compared with alternatives), overall professional sentiment and financial characteristics for the stock Chr. Hansen are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Chr. Hansen. The consolidated Growth Rank has a good rank of 67, 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 67% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 76, which means that professional investors are more optimistic about the stock than for 76% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 10, which means that the share price of Chr. Hansen 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 90% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 16, which means that the company has a financing structure that is riskier than those of 84% 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 26, Chr. Hansen is worse than 74% 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 67), and professional market sentiment is positive (Sentiment Rank of 76), 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 Chr. Hansen 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 Chr. Hansen is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Chr. Hansen. Analyst Opinions are at a rank of 23 (worse than 77% 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 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Chr. Hansen. Even better, the Professional Investors rank is 78, meaning that professional investors hold more stock in this company than in 78% 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 76 (more positive than 76% compared with investment alternatives), Chr. Hansen 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: Chr. Hansen Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Chr. Hansen shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Chr. Hansen. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 65% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Chr. Hansen's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 12 which means that the stock price compared with what market professionals expect for future profit levels is higher than 88% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 13 is also low. Compared with invested capital, the stock price is higher than for 87% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Chr. Hansen's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Chr. Hansen? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Chr. Hansen only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Chr. Hansen Growth Momentum good
| GROWTH METRICS | February 22, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 45 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 62 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 62 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 64 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 67 |
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ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Chr. Hansen 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 Chr. Hansen. Profit Growth has a rank of 62 which means that currently professionals expect the company to grow its profits more than 62% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 62, and Stock Returns has a rank of 64 which means that the stock returns have recently been above 64% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 45 (55% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Chr. Hansen Debt Financing Safety risky
| SAFETY METRICS | February 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 12 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 36 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
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ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company Chr. Hansen 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 Chr. Hansen 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 Chr. Hansen. Liquidity is at 36, meaning that the company generates less profit to service its debt than 64% 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 34, meaning the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. Finally, Refinancing is at a rank of 12 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% compared with alternatives), Chr. Hansen 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: Chr. Hansen Lowest Financial Performance
| COMBINED PERFORMANCE | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 10 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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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), Chr. Hansen (Specialty Chemicals, Denmark) shares have lower financial characteristics compared with similar stocks. Shares of Chr. Hansen are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives), and are riskily financed (Safety Rank of 16, which means above-average debt burdens) but show above-average growth (Growth Rank of 67). ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Chr. Hansen's financial characteristics. As the company Chr. Hansen shows low value with an Obermatt Value Rank of 10 (90% 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 67% of comparable companies (Obermatt Growth Rank is 67). 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 16 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 Chr. Hansen, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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