August 1, 2024
Top 10 Stock Holmen Sell 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: Holmen – Top 10 Stock in Wood & Timber Industry
Holmen is listed as a top 10 stock on August 01, 2024 in the market index Timber Industry 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 4 (4% performer), Obermatt issues an overall sell recommendation for Holmen on August 01, 2024.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Paper Products |
| Index | Human Rights, Renewables Users, SDG 13, SDG 14, SDG 15, SDG 17, Timber Industry |
| 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 Holmen Sell
| 360 METRICS | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| SENTIMENT | ||||||||
| SENTIMENT | 27 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock Holmen are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Holmen. The only rank that is above average is the consolidated Safety Rank at 82, which means that the company has a financing structure that is safer than those of 82% 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 6, which means that the share price of Holmen 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 6, 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 27, which means that professional investors are more pessimistic about the stock than for 73% 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 4, Holmen is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that Holmen shares are on the riskier side for investors. 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 27. The negative market view on Holmen 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 Holmen only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 27 (better than 27% compared with alternatives), overall professional sentiment and engagement for the stock Holmen is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Holmen. Analyst Opinions are at a rank of 5 (worse than 95% 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 72, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Holmen. More encouragingly, the Professional Investors rank is 65, which means that professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 26, 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 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 27 (less encouraging than 73% compared with investment alternatives), Holmen has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Holmen. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Holmen Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 6 (worse than 94% compared with alternatives), Holmen shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Holmen. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 60, which means that the stock price is lower compared with invested capital than for 60% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 3 which means the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Holmen's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 60 and for the dividend yields rank which is lower than for 68% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 6, is a sell recommendation based on Holmen's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Holmen, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Holmen Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 6 (better than 6% compared with alternatives), Holmen 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 Holmen. Sales Growth has a below market rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors. The same is valid for Capital Growth, with a rank of 45, and Profit Growth, with a rank of 22. Currently, professionals expect the company to grow its profits less than 78% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 6, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Holmen, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Holmen Debt Financing Safety very solid
| SAFETY METRICS | August 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 95 |
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| REFINANCING | ||||||||
| REFINANCING | 16 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
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ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2024, the company Holmen has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Holmen 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 Holmen. Leverage is at a rank of 95, meaning the company has a below-average debt-to-equity ratio. It has less debt than 95% of its competitors. Liquidity is also good at a rank of 96, meaning the company generates more profit to service its debt than 96% 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 16, 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 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), Holmen 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 Holmen. 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: Holmen Lowest Financial Performance
| COMBINED PERFORMANCE | August 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 6 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 8 |
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ANALYSIS: With an Obermatt Combined Rank of 8 (worse than 92% compared with investment alternatives), Holmen (Paper Products, Sweden) shares have lower financial characteristics compared with similar stocks. Shares of Holmen are low in value (priced high) with a consolidated Value Rank of 6 (worse than 94% of alternatives) and show below-average growth (Growth Rank of 6) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 8, is a sell recommendation based on Holmen's financial characteristics. As the company Holmen's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 6) and low growth (Obermatt Growth Rank of 6), 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 82) 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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