November 7, 2024
Top 10 Stock Fortum 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: Fortum – Top 10 Stock in Optionsmäklarna Helsinki Stock Exchange Helsinki Index OMX 25
Fortum is listed as a top 10 stock on November 07, 2024 in the market index OMX 25 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for Fortum on November 07, 2024.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Electric Utilities |
| Index | OMX 25, Low Emissions, Dividends Europe, Nuclear |
| 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 Fortum Hold
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| SENTIMENT | ||||||||
| SENTIMENT | 7 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock Fortum are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Fortum. The only rank that is above average is the consolidated Safety Rank at 88, which means that the company has a financing structure that is safer than those of 88% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 49, which means that the share price of Fortum is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 31, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 7, which means that professional investors are more pessimistic about the stock than for 93% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, Fortum is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 7. The negative market view on Fortum may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Fortum negative
ANALYSIS: With an Obermatt Sentiment Rank of 7 (better than 7% compared with alternatives), overall professional sentiment and engagement for the stock Fortum is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Fortum. Analyst Opinions are at a rank of 9 (worse than 91% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 26, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 4, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 96% of competitors). On the upside, the Professional Investors rank is 75, which means that professional investors hold more stock in this company than in 75% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 7 (less encouraging than 93% compared with investment alternatives), Fortum has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Fortum stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Fortum Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Fortum shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Fortum. Expected dividend yields are higher than for 84% of comparable companies (a Dividend Yield rank of 84), 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 51, which means that the stock price is lower compared with invested capital than for 51% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 29 which means that the stock price compared with what market professionals expect for future profits is higher than for 71% of comparable companies, indicating a low value concerning Fortum's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Fortum with a rank of 47. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 53% of comparable companies, indicating a low value concerning Fortum's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Fortum'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, Fortum 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: Fortum Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Fortum 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 Fortum. Capital Growth has a rank of 57, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has only a rank of 9, which means that, currently, professionals expect the company to grow less than 91% of its competitors, and Profit Growth is also low at a rank of 34. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Fortum, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Fortum Debt Financing Safety very solid
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 75 |
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| REFINANCING | ||||||||
| REFINANCING | 89 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 88 |
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ANALYSIS: With an Obermatt Safety Rank of 88 (better than 88% compared with alternatives) for 2024, the company Fortum has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Fortum 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, where all three are above average for Fortum. Leverage is at 75, meaning the company has a below-average debt-to-equity ratio. It has less debt than 75% of its competitors. Refinancing is at a rank of 89, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 89% of its competitors. Finally, Liquidity is also good at a rank of 66, which means that the company generates more profit to service its debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 88 (better than 88% compared with alternatives), Fortum has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Fortum Above-Average Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| COMBINED | ||||||||
| COMBINED | 56 |
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ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Fortum (Electric Utilities, Finland) shares have above-average financial characteristics compared with similar stocks. Shares of Fortum are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 88), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Fortum's financial characteristics. As the company Fortum's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 88) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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