April 11, 2024
Top 10 Stock Franklin Electric 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: Franklin Electric – Top 10 Stock in Water Technology
Franklin Electric is listed as a top 10 stock on April 11, 2024 in the market index Water Tech because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the 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 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Franklin Electric on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Industrial Machinery |
| Index | Water Tech, NASDAQ |
| 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 Franklin Electric Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 10 |
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| SAFETY | ||||||||
| SAFETY | 91 |
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| SENTIMENT | ||||||||
| SENTIMENT | 76 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Franklin Electric are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Franklin Electric. The consolidated Sentiment Rank has a good rank of 76, which means that professional investors are more optimistic about the stock than for 76% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 91 or better than 91% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 37, meaning that the share price of Franklin Electric is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 10. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Franklin Electric is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 76) and safe financing practices (Safety Rank of 91), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Franklin Electric̣ is bright. 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 Franklin Electric 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 Franklin Electric is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Franklin Electric. Analyst Opinions are at a rank of 34 (worse than 66% 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 Franklin Electric. Even better, the Professional Investors rank is 98, meaning that professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 73, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 73% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 76 (more positive than 76% compared with investment alternatives), Franklin Electric 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: Franklin Electric Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Franklin Electric shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Franklin Electric. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 57% 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 44 which means that the stock price compared with what market professionals expect for future profits is higher than 56% of comparable companies, indicating a low value concerning Franklin Electric's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 33 which means that the stock price compared with what market professionals expect for future profit levels is higher than 67% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 29 is also low. Compared with invested capital, the stock price is higher than for 71% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Franklin Electric's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Franklin Electric? 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 Franklin Electric only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Franklin Electric Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 10 (better than 10% compared with alternatives), Franklin Electric shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Franklin Electric. Sales Growth has a rank of 33, which means that currently professionals expect the company to grow less than 67% of its competitors. The same is valid for Profit Growth, with a rank of 41, and Capital Growth with 22. In addition, Stock Returns have a below market rank of 36, which means that the stock returns have recently been below 64% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 10, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Franklin Electric Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 86 |
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| REFINANCING | ||||||||
| REFINANCING | 44 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 91 |
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ANALYSIS: With an Obermatt Safety Rank of 91 (better than 91% compared with alternatives) for 2024, the company Franklin Electric has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Franklin Electric 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 two out of three indicators above average for Franklin Electric. Leverage is at a rank of 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors. Liquidity is also good at a rank of 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 44, 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 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 91 (better than 91% compared with alternatives), Franklin Electric has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Franklin Electric. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Franklin Electric Below-Average Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 10 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Franklin Electric (Industrial Machinery, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Franklin Electric are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives) and show below-average growth (Growth Rank of 10) but are safely financed (Safety Rank of 91), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Franklin Electric's financial characteristics. As the company Franklin Electric's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 37) and low growth (Obermatt Growth Rank of 10), 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 91) 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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