May 23, 2024
Top 10 Stock Headlam 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: Headlam – Top 10 Stock in Dividend Champions Europe
Headlam is listed as a top 10 stock on May 23, 2024 in the market index Dividends Europe because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 40 (40% performer), Obermatt assesses an overall hold recommendation for Headlam on May 23, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Distributors |
| Index | FTSE All Shares, Dividends Europe, Diversity Europe, Sound Pay Europe |
| 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 Headlam Hold
| 360 METRICS | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 4 |
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| 360° VIEW | ||||||||
| 360° VIEW | 40 |
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ANALYSIS: With an Obermatt 360° View of 40 (better than 40% compared with alternatives), overall professional sentiment and financial characteristics for the stock Headlam are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Headlam. The consolidated Value Rank has an attractive rank of 82, which means that the share price of Headlam 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 82% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 98. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 4. Professional investors are more confident in 96% other stocks. The consolidated Growth Rank also has a low rank of 9, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 91 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 40, Headlam is worse than 60% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 82), and the financing structure is on the safer side (Safety Rank of 98). However, sentiment in the professional investor community is below-average (Sentiment Rank of 4), as is the growth momentum for the company (Growth Rank of 9). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Headlam negative
ANALYSIS: With an Obermatt Sentiment Rank of 4 (better than 4% compared with alternatives), overall professional sentiment and engagement for the stock Headlam 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 Headlam. Analyst Opinions are at a rank of 23 (worse than 77% 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 1 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 37, 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 63% of competitors). No wonder, the Professional Investors rank is only 4, which means that professional investors hold less stock in this company than in 96% of alternative investment opportunities. Pros tend to stay away from Headlam, 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 4 (less encouraging than 96% compared with investment alternatives), Headlam 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: Headlam Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 82 (better than 82% compared with alternatives) for 2024, Headlam shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Headlam. Price-to-Sales (P/S) is 77 which means that the stock price compared with what market professionals expect for future sales is lower than for 77% of comparable companies, indicating a good value for Headlam's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 69. Finally, compared with other companies in the same industry, dividend yields of Headlam are expected to be higher than for 90% of all competitors (a Dividend Yield rank of 90). The only low rank is for expected profits with a Price-to-Profit Rank of 29, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 82, is a buy recommendation based on Headlam's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Headlam Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 9 (better than 9% compared with alternatives), Headlam 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 three out of four indicators below average for Headlam. Only Capital Growth has a good rank of 60, which means that currently professionals expect the company to grow its invested capital more than 1% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 26 which means that currently professionals expect the company to grow less than 74% of its competitors. Profit Growth with a rank of 1 and Stock Returns with a rank of 16 are also low (below 84% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 9, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Headlam is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Headlam Debt Financing Safety very solid
| SAFETY METRICS | May 23, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 76 |
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| REFINANCING | ||||||||
| REFINANCING | 82 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2024, the company Headlam has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Headlam 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 Headlam. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 82, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 82% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Headlam 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: Headlam Top Financial Performance
| COMBINED PERFORMANCE | May 23, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 9 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Headlam (Distributors, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Headlam are a good value (attractively priced) with a consolidated Value Rank of 82 (better than 82% of alternatives), are safely financed (Safety Rank of 98, which means low debt burdens), but show below-average growth (Growth Rank of 9). ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Headlam's financial characteristics. As the company Headlam's key financial metrics exhibit good value (Obermatt Value Rank of 82) but low growth (Obermatt Growth Rank of 9) while being safely financed (Obermatt Safety Rank of 98), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 82% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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