June 22, 2023
Top 10 Stock ICON 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: ICON – Top 10 Stock in Employee Health Leaders in Europe
ICON is listed as a top 10 stock on June 22, 2023 in the market index Employee Health EU because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 10 (10% performer), Obermatt issues an overall sell recommendation for ICON on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Ireland |
| Industry | Life Sciences Tools & Services |
| Index | Employee Health EU, NASDAQ |
| 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 ICON Sell
| 360 METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 37 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 20 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 29 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 10 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 10 (better than 10% compared with alternatives), overall professional sentiment and financial characteristics for the stock ICON are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for ICON. The consolidated Value Rank has a low rank of 29 which means that the share price of ICON is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 71% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 37, which means 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. This means that growth is lower than for 37% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 20, which means that the company has a riskier financing structure than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 29, which means that professional investors are more pessimistic about the stock than for 71% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 10, ICON is worse than 90% of all alternative stock investment opportunities based on the Obermatt Method. This means that ICON shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 29. The negative market view on ICON may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments 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 confirmed by investor behavior today. While ICON may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for ICON only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock ICON is below industry average.
RECOMMENDATION: With an Obermatt Sentiment Rank of 29 (less encouraging than 71% compared with investment alternatives), ICON has a reputation among professional investors that is below that of its competitors.
Value Strategy: ICON Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), ICON shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for ICON. 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 61, which means that the stock price is lower compared with invested capital than for 61% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 39 which means the stock price compared with what market professionals expect for future profits is higher than 61% of comparable companies, indicating a low value concerning ICON'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 61 and for the dividend yields rank which is lower than for 99% 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 29, is a HOLD recommendation based on ICON's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for ICON, 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: ICON Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), ICON 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 three out of four metrics below average for ICON. While Profit Growth has a good rank of 65, as professionals currently expect the company to grow its profits more than 65% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 48, which means that currently professionals expect the company to grow less than 52% of its competitors, while Capital Growth has a rank of 24 and Stock Returns have been below market median, with a rank of 45 (55% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a HOLD 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: ICON Debt Financing Safety risky
| SAFETY METRICS | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 48 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 29 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company ICON has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of ICON is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for ICON. Liquidity is at 18, meaning that the company generates less profit to service its debt than 82% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Finally, Refinancing is at a rank of 29 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 71% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 20 (worse than 80% compared with alternatives), ICON has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. ...read more
Combined financial peformance: ICON Lowest Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 37 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 18 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 12 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), ICON (Life Sciences Tools & Services, Ireland) shares have lower financial characteristics compared with similar stocks. Shares of ICON are low in value (priced high) with a consolidated Obermatt Value Rank of 29 (worse than 71% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 12, is a sell recommendation based on ICON's financial characteristics. As the company ICON's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 29), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 20), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.