July 6, 2023
Top 10 Stock Hannover Rück 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: Hannover Rück – Top 10 Stock in Deutscher Aktienindex Mid Cap MDAX
Hannover Rück is listed as a top 10 stock on July 06, 2023 in the market index MDAX 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 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Hannover Rück on July 06, 2023.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Reinsurance |
| Index | CDAX, Sound Pay Europe, MDAX |
| 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 Hannover Rück Buy
| 360 METRICS | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 25 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 53 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 22 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 63 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 63 (better than 63% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hannover Rück are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Hannover Rück. The consolidated Growth Rank has a good rank of 53, 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 53% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 94 which means that the company has a financing structure that is safer than 94% 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 25 which means that the share price of Hannover Rück 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 75% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 22, which means that professional investors are more pessimistic about the stock than for 78% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Hannover Rück is better positioned than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 53), and the company is safely financed (Safety Rank of 94). However, professional market sentiment is low(Sentiment Rank of 22). The negative market view on Hannover Rück 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 Hannover Rück 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 Hannover Rück negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock Hannover Rück is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Hannover Rück. Analyst Opinions are at a rank of 39 (worse than 61% 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 46 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 29, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 71% of competitors). No wonder, the Professional Investors rank is only 45, which means that professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to stay away from Hannover Rück, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), Hannover Rück has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Hannover Rück Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 25 (worse than 75% compared with alternatives), Hannover Rück shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Hannover Rück. Price-to-Sales (P/S) is 71, which means that the stock price compared with what market professionals expect for future sales is lower than 71% of comparable companies, indicating a good value concerning to Hannover Rück's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 18, meaning that dividends are expected to be lower than for 82% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 86% of alternatives (only 14% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 65% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 25, is a hold recommendation based on Hannover Rück's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Hannover Rück could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Hannover Rück looks like an expensive investment today. ...read more
Growth Strategy: Hannover Rück Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), Hannover Rück 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 half of the indicators below and half above average for Hannover Rück. Profit Growth has a rank of 65, which means that currently professionals expect the company to grow its profits more than 65% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 91 (above 91% of alternative investments). But Sales Growth has a below the median rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Capital Growth also has a lower rank of 43. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Hannover Rück. ...read more
Safety Strategy: Hannover Rück Debt Financing Safety very solid
| SAFETY METRICS | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 46 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 66 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 93 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2022, the company Hannover Rück has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Hannover Rück 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 Hannover Rück. Refinancing is at 66, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 66% of its competitors. Liquidity is also good at 93, meaning the company generates more profit to service its debt than 93% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 46, which means the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), Hannover Rück has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Hannover Rück could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Hannover Rück Top Financial Performance
| COMBINED PERFORMANCE | July 6, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 25 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 53 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 93 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 92 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Hannover Rück (Reinsurance, Germany) shares have much better financial characteristics than comparable stocks. Shares of Hannover Rück are low in value (priced high) with a consolidated Value Rank of 25 (worse than 75% of alternatives). But they show above-average growth (Growth Rank of 53) and are safely financed (Safety Rank of 94, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Hannover Rück's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Hannover Rück exhibits low value (Obermatt Value Rank of 25), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 53). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 94) 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.