September 19, 2024
Top 10 Stock Digital Realty Trust Sell 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: Digital Realty Trust – Top 10 Stock in Real Estate in the United States
Digital Realty Trust is listed as a top 10 stock on September 19, 2024 in the market index R/E USA because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 18 (18% performer), Obermatt issues an overall sell recommendation for Digital Realty Trust on September 19, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | REITs: Specialized |
| Index | Energy Efficient, Renewables Users, R/E USA, S&P 500 |
| 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 Digital Realty Trust Sell
| 360 METRICS | September 19, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 17 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 63 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 65 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 44 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 18 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 18 (better than 18% compared with alternatives), overall professional sentiment and financial characteristics for the stock Digital Realty Trust are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Digital Realty Trust. The consolidated Growth Rank has a good rank of 63, 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 63% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 65 which means that the company has a financing structure that is safer than 65% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 17 which means that the share price of Digital Realty Trust is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 83% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 44, which means that professional investors are more pessimistic about the stock than for 56% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 18, Digital Realty Trust is worse than 82% of all alternative stock investment opportunities based on the Obermatt Method. This means that Digital Realty Trust shares are on the riskier side for investors. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 63), and the company is safely financed (Safety Rank of 65). However, professional market sentiment is low(Sentiment Rank of 44). The negative market view on Digital Realty Trust may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Digital Realty Trust compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Digital Realty Trust only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock Digital Realty Trust is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Digital Realty Trust. Analyst Opinions are at a rank of 38 (worse than 62% 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 Digital Realty Trust. Market Pulse is also positive with a rank of 73, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 73% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 26, which means that professional investors hold less stock in this company than in 74% 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 a consolidated Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), Digital Realty Trust 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: Digital Realty Trust Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Digital Realty Trust 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 Digital Realty Trust. Price-to-Sales is 31 which means that the stock price compared with what market professionals expect for future profits is higher than 69% of comparable companies, indicating a low value concerning Digital Realty Trust's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 23, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Digital Realty Trust. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 1 and Dividend Yield, which is lower than 62% 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 17, is a sell recommendation based on Digital Realty Trust's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Digital Realty Trust? 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 Digital Realty Trust? 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. Digital Realty Trust 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: Digital Realty Trust Growth Momentum good
| GROWTH METRICS | September 19, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 72 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 8 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 70 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 77 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 63 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Digital Realty Trust 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 Digital Realty Trust. Sales Growth has a rank of 72 which means that currently, professionals expect the company to grow more than 72% of its competitors. Capital Growth is also above 8% of competitors with a rank of 70, and Stock Returns with the rank of 77 is also an outperformance. Only Profit Growth is low with a rank of 8 which means that currently, professionals expect the company to grow its profits less than 92% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Digital Realty Trust is a good growth stock. ...read more
Safety Strategy: Digital Realty Trust Debt Financing Safety above-average
| SAFETY METRICS | September 19, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 54 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 17 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 65 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Digital Realty Trust 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 Digital Realty Trust 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 Digital Realty Trust and the other two below average. Leverage is at a rank of 54 meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors.Refinancing is at a rank of 17, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 83% of its competitors. Liquidity is at a rank of 26, meaning that the company generates less profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Digital Realty Trust has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Digital Realty Trust are on the safer side. ...read more
Combined financial peformance: Digital Realty Trust Above-Average Financial Performance
| COMBINED PERFORMANCE | September 19, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 17 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 63 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 26 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 69 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), Digital Realty Trust (REITs: Specialized, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Digital Realty Trust are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives). But they show above-average growth (Growth Rank of 63) and are safely financed (Safety Rank of 65, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on Digital Realty Trust's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Digital Realty Trust exhibits low value (Obermatt Value Rank of 17), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 63). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 65) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...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.