July 13, 2023
Top 10 Stock Edenred 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: Edenred – Top 10 Stock in Société des Bourses Françaises Index SBF 120
Edenred is listed as a top 10 stock on July 13, 2023 in the market index SBF 120 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. Based on the Obermatt 360° View of 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for Edenred on July 13, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Data Processing & Outsourcing |
| Index | CAC All, SBF 120, Dividends Europe, Employee Focus EU |
| 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 Edenred Strong Buy
| 360 METRICS | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| SENTIMENT | ||||||||
| SENTIMENT | 84 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Edenred are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Edenred. The consolidated Value Rank has an attractive rank of 84, which means that the share price of Edenred 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 84% of alternative stocks in the same industry. 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 84. But the company’s financing is risky with a Safety rank of 25. This means 75% of comparable companies have a safer financing structure than Edenred. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, Edenred is better positioned than 84% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 84), above-average growth (Growth Rank of 63), and positive market sentiment in the professional investor community (Sentiment Rank of 84), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 25), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Edenred is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Edenred very positive
ANALYSIS: With an Obermatt Sentiment Rank of 84 (better than 84% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Edenred is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Edenred. Analyst Opinions are at a rank of 57 (better than 57% 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 50, 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 Edenred. Finally, the Professional Investors rank is 90, which means that currently, professional investors hold more stock in this company than in 90% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% compared with investment alternatives), Edenred 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 47, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 53% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Edenred 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: Edenred Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2023, Edenred shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Edenred. Expected dividend yields are higher than for 83% of comparable companies (a Dividend Yield rank of 83), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 97, which means that the stock price is lower compared with invested capital than for 97% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 28 which means that the stock price compared with what market professionals expect for future profits is higher than for 72% of comparable companies, indicating a low value concerning Edenred's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Edenred with a rank of 38. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 62% of comparable companies, indicating a low value concerning Edenred's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a buy recommendation based on Edenred's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Edenred may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Edenred Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Edenred 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 Edenred. Sales Growth has a rank of 73 which means that currently, professionals expect the company to grow more than 73% of its competitors. Both Profit Growth, with a rank of 65, and Stock Returns, with a rank of 83, are also above average. But Capital Growth only has a rank of 1, which means that, currently, professionals expect the company to grow its invested capital less than 99% 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. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Edenred Debt Financing Safety below-average
| SAFETY METRICS | July 13, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 3 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 25 |
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ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company Edenred has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Edenred 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 just one indicator above average for Edenred. Liquidity is at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 22, 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 78% of its competitors. Leverage is also high at a rank of 3, which means that the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), Edenred has a financing structure that is riskier 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: Edenred Above-Average Financial Performance
| COMBINED PERFORMANCE | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Edenred (Data Processing & Outsourcing, France) shares have above-average financial characteristics compared with similar stocks. Shares of Edenred are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives), show above-average growth (Growth Rank of 63) but are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 72, is a buy recommendation based on Edenred's financial characteristics. As the company Edenred's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 84) and above-average growth (Obermatt Growth Rank of 63), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 25) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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