August 22, 2024
Top 10 Stock Hoya 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: Hoya – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Hoya is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 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 87 (top 87% performer), Obermatt assesses an overall strong buy recommendation for Hoya on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Health Care Supplies |
| Index | TOPIX 100, Water Efficiency |
| 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 Hoya Strong Buy
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 87 |
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ANALYSIS: With an Obermatt 360° View of 87 (better than 87% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Hoya are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Hoya. The consolidated Sentiment Rank has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 90 or better than 90% 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 14, meaning that the share price of Hoya 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 43. ...read more
RECOMMENDATION: With a consolidated 360° View of 87, Hoya is better positioned than 87% 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 100) and safe financing practices (Safety Rank of 90), 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 Hoyạ 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 Hoya very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Hoya is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Hoya. Analyst Opinions are at a rank of 85 (better than 85% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 84, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Hoya. Finally, the Professional Investors rank is 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Hoya has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 43, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 57% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Hoya is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Hoya Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 14 (worse than 86% compared with alternatives), Hoya shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Hoya. Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Hoya's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 7, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Hoya. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 25 and Dividend Yield, which is lower than 76% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 14, is a sell recommendation based on Hoya's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Hoya? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Hoya? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Hoya may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Hoya Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Hoya 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 but one indicator above average for Hoya. Sales Growth has a rank of 50 which means that currently, professionals expect the company to grow more than 50% of its competitors. Both Profit Growth, with a rank of 53, and Stock Returns, with a rank of 65, are also above average. But Capital Growth only has a rank of 18, which means that, currently, professionals expect the company to grow its invested capital less than 82% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Hoya Debt Financing Safety very solid
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 87 |
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| REFINANCING | ||||||||
| REFINANCING | 48 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 90 |
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ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2024, the company Hoya has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Hoya 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 Hoya. Leverage is at a rank of 87, meaning the company has a below-average debt-to-equity ratio. It has less debt than 87% of its competitors. Liquidity is also good at a rank of 90, meaning the company generates more profit to service its debt than 90% 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 48, 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 52% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), Hoya 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 Hoya. 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: Hoya Below-Average Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Hoya (Health Care Supplies, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Hoya are low in value (priced high) with a consolidated Value Rank of 14 (worse than 86% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 90), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Hoya's financial characteristics. As the company Hoya's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 14) and low growth (Obermatt Growth Rank of 43), 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 90) 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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