October 10, 2024
Top 10 Stock Munich RE 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: Munich RE – Top 10 Stock in Diversity Leaders in Europe
Munich RE is listed as a top 10 stock on October 10, 2024 in the market index Diversity Europe because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Munich RE on October 10, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Reinsurance |
| Index | CDAX, DAX 40, EURO STOXX 50, Diversity Europe |
| Size class | XX-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 Munich RE Strong Buy
| 360 METRICS | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Munich RE are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Munich RE. The consolidated Growth Rank has a good rank of 89, which means that the company experiences above-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 higher than for 89% of competitors in the same industry. The consolidated Safety Rank at 100 means that the company has a financing structure that is safer than 100% 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 good rank of 81, which means that professional investors are more optimistic about the stock than for 81% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 35, meaning that the share price of Munich RE is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 65% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 77, Munich RE is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 89), a safe financing structure (Safety Rank of 100), and positive professional market sentiment (Sentiment Rank of 81), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Munich RE compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (89% better than peers). The value rank could be the reverse reflection of that (11%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Munich RE very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Munich RE is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Munich RE. Analyst Opinions are at a rank of 38 (worse than 62% 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 68, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Munich RE. Even better, the Professional Investors rank is 72, meaning that professional investors hold more stock in this company than in 72% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 69, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 69% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 81 (more positive than 81% compared with investment alternatives), Munich RE has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Munich RE Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Munich RE shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Munich RE. Price-to-Sales (P/S) is 61, which means that the stock price compared with what market professionals expect for future sales is lower than for 61% of comparable companies, indicating a good value concerning Munich RE's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 52% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 19 (dividends are expected to be higher than for 19% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 63% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Munich RE to 37. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Munich RE's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Munich RE Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2022, Munich RE shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Munich RE. Profit Growth has a rank of 83 which means that currently professionals expect the company to grow its profits more than 83% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 67, and Stock Returns has a rank of 71 which means that the stock returns have recently been above 71% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 41 (59% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Munich RE Debt Financing Safety very solid
| SAFETY METRICS | October 10, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 77 |
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| REFINANCING | ||||||||
| REFINANCING | 2 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2022, the company Munich RE has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Munich RE 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 Munich RE. Leverage is at a rank of 77, meaning the company has a below-average debt-to-equity ratio. It has less debt than 77% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% 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 2, 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 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Munich RE 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 Munich RE. 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: Munich RE Top Financial Performance
| COMBINED PERFORMANCE | October 10, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 35 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| COMBINED | ||||||||
| COMBINED | 96 |
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ANALYSIS: With an Obermatt Combined Rank of 96 (better than 96% compared with investment alternatives), Munich RE (Reinsurance, Germany) shares have much better financial characteristics than comparable stocks. Shares of Munich RE are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives). But they show above-average growth (Growth Rank of 89) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 96, is a strong buy recommendation based on Munich RE's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Munich RE exhibits low value (Obermatt Value Rank of 35), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 89). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 100) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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