June 22, 2023
Top 10 Stock DENKA 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: DENKA – Top 10 Stock in Nikkei 225 Index
DENKA is listed as a top 10 stock on June 22, 2023 in the market index Nikkei 225 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 50 (high 50% performer), Obermatt assesses an overall buy recommendation for DENKA on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Commodity Chemicals |
| Index | Low Emissions, Energy Efficient, Nikkei 225 |
| 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 DENKA Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| SENTIMENT | ||||||||
| SENTIMENT | 28 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock DENKA are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for DENKA. The consolidated Value Rank has an attractive rank of 91, which means that the share price of DENKA 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 91% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 59. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 28. Professional investors are more confident in 72% other stocks. The consolidated Growth Rank also has a low rank of 29, 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. 71 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 50, DENKA is better positioned than 50% 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 91), and the financing structure is on the safer side (Safety Rank of 59). However, sentiment in the professional investor community is below-average (Sentiment Rank of 28), as is the growth momentum for the company (Growth Rank of 29). 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 DENKA only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 28 (better than 28% compared with alternatives), overall professional sentiment and engagement for the stock DENKA is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for DENKA. Analyst Opinions are at a rank of 40 (worse than 60% 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 means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in DENKA. Market Pulse is also positive with a rank of 58, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 58% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 13, which means that professional investors hold less stock in this company than in 87% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 28 (less encouraging than 72% compared with investment alternatives), DENKA has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: DENKA Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 91 (better than 91% compared with alternatives) for 2023, DENKA shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for DENKA. Price-to-Sales is 60 which means that the stock price compared with what market professionals expect for future sales is lower than for 60% of comparable companies, indicating a good value for DENKA's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 91% 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 67. Compared with other companies in the same industry, dividend yields of DENKA are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 91, is a strong buy recommendation based on DENKA'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 DENKA based on its detailed value metrics.
Growth Strategy: DENKA Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), DENKA 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 DENKA. While Profit Growth has a good rank of 74, as professionals currently expect the company to grow its profits more than 74% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 46, which means that currently professionals expect the company to grow less than 54% of its competitors, while Capital Growth has a rank of 7 and Stock Returns have been below market median, with a rank of 23 (77% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, 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: DENKA Debt Financing Safety above-average
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 68 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 59 |
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ANALYSIS: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), the company DENKA 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 DENKA 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 DENKA. Liquidity is at 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 47, 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 53% of its competitors. Leverage is also high at a rank of 38, which means that the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 59 (better than 59% compared with alternatives), DENKA has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: DENKA Top Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 91 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 68 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), DENKA (Commodity Chemicals, Japan) shares have much better financial characteristics than comparable stocks. Shares of DENKA are a good value (attractively priced) with a consolidated Obermatt Value Rank of 91 (better than 91% of alternatives), are safely financed (Safety Rank of 59, which means low debt burdens), but show below-average growth (Growth Rank of 29). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 77, is a strong buy recommendation based on DENKA's financial characteristics. As the company DENKA's key financial metrics exhibit good value (Obermatt Value Rank of 91) but low growth (Obermatt Growth Rank of 29) while being safely financed (Obermatt Safety Rank of 59), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 91% 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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