June 29, 2023
Top 10 Stock Hornbach Holding Strong 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: Hornbach Holding – Top 10 Stock in Deutscher Aktienindex Small Cap SDAX
Hornbach Holding is listed as a top 10 stock on June 29, 2023 in the market index SDAX because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for Hornbach Holding on June 29, 2023.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Home Improvement Retail |
| Index | CDAX, Diversity Europe, SDAX |
| 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 Hornbach Holding Strong Buy
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 86 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Hornbach Holding are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Hornbach Holding. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Hornbach Holding is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 96% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 86. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. But the consolidated Growth Rank has a low rank of 25, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 75 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, Hornbach Holding is better positioned than 92% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 96), secure financing practices (Safety Rank of 86), and positive market sentiment in the professional investor community (Sentiment Rank of 86). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 25), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Hornbach Holding is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Hornbach Holding very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Hornbach Holding is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Hornbach Holding. Analyst Opinions are at a rank of 77 (better than 77% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 80, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Hornbach Holding. The Professional Investors rank is 64, which means that currently, professional investors hold more stock in this company than in 64% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 63 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 63% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Hornbach Holding has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Hornbach Holding stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Hornbach Holding Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2023, Hornbach Holding shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Hornbach Holding. Price-to-Sales is 85 which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value for Hornbach Holding's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 97% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 80. Compared with other companies in the same industry, dividend yields of Hornbach Holding are expected to be higher than for 68% of all competitors (a Dividend Yield rank of 68). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Hornbach Holding's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Hornbach Holding based on its detailed value metrics.
Growth Strategy: Hornbach Holding Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Hornbach Holding shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Hornbach Holding. Sales Growth has a rank of 23, which means that currently professionals expect the company to grow less than 77% of its competitors. The same is valid for Profit Growth, with a rank of 43, and Capital Growth with 35. In addition, Stock Returns have a below market rank of 45, which means that the stock returns have recently been below 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold 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: Hornbach Holding Debt Financing Safety very solid
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 43 |
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| REFINANCING | ||||||||
| REFINANCING | 86 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
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ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2023, the company Hornbach Holding has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Hornbach Holding 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 Hornbach Holding. Refinancing is at 86, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. Liquidity is also good at 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 43, which means the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), Hornbach Holding 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 Hornbach Holding 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: Hornbach Holding Top Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Hornbach Holding (Home Improvement Retail, Germany) shares have much better financial characteristics than comparable stocks. Shares of Hornbach Holding are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), are safely financed (Safety Rank of 86, which means low debt burdens), but show below-average growth (Growth Rank of 25). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Hornbach Holding's financial characteristics. As the company Hornbach Holding's key financial metrics exhibit good value (Obermatt Value Rank of 96) but low growth (Obermatt Growth Rank of 25) while being safely financed (Obermatt Safety Rank of 86), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 96% 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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