December 26, 2024
Top 10 Stock HMM 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: HMM – Top 10 Stock in Korea Composite Stock Price Index KOSPI
HMM is listed as a top 10 stock on December 26, 2024 in the market index KOSPI 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 50 (high 50% performer), Obermatt assesses an overall buy recommendation for HMM on December 26, 2024.
Snapshot: Obermatt Ranks
| Country | South Korea |
| Industry | Marine |
| Index | Low Emissions, KOSPI |
| 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 HMM Buy
| 360 METRICS | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 93 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock HMM are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for HMM. The consolidated Sentiment Rank has a good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 93 or better than 93% 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 41, meaning that the share price of HMM 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 17. ...read more
RECOMMENDATION: With a consolidated 360° View of 50, HMM is better positioned than 50% 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 54) and safe financing practices (Safety Rank of 93), 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 HMṂ 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 HMM positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock HMM is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for HMM. Analyst Opinions are at a rank of 44 (worse than 56% 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 means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in HMM. Market Pulse is also positive with a rank of 89, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 89% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 41, which means that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), HMM has a reputation among professional investors that is above-average compared with that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: HMM Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), HMM 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 HMM. Expected dividend yields are higher than for 51% of comparable companies (a Dividend Yield rank of 51), 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 81, which means that the stock price is lower compared with invested capital than for 81% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than for 78% of comparable companies, indicating a low value concerning HMM's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for HMM with a rank of 31. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 69% of comparable companies, indicating a low value concerning HMM's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on HMM'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, HMM 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: HMM Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), HMM 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 metrics below average for HMM. While Profit Growth has a good rank of 87, as professionals currently expect the company to grow its profits more than 87% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 6, which means that currently professionals expect the company to grow less than 94% of its competitors, while Capital Growth has a rank of 17 and Stock Returns have been below market median, with a rank of 35 (65% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: HMM Debt Financing Safety very solid
| SAFETY METRICS | December 26, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 94 |
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| REFINANCING | ||||||||
| REFINANCING | 100 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 38 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 93 |
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ANALYSIS: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives) for 2024, the company HMM has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of HMM 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 two out of three are above average for HMM.Leverage is at 94, meaning the company has a below-average debt-to-equity ratio. It has less debt than 94% of its competitors.Refinancing is at a rank of 100, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. Liquidity is at 38, meaning that the company generates less profit to service its debt than 62% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 93 (better than 93% compared with alternatives), HMM has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: HMM Below-Average Financial Performance
| COMBINED PERFORMANCE | December 26, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| COMBINED | ||||||||
| COMBINED | 47 |
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ANALYSIS: With an Obermatt Combined Rank of 47 (worse than 53% compared with investment alternatives), HMM (Marine, South Korea) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of HMM are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives) and show below-average growth (Growth Rank of 17) but are safely financed (Safety Rank of 93), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 47, is a hold recommendation based on HMM's financial characteristics. As the company HMM's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 41) and low growth (Obermatt Growth Rank of 17), 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 93) 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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