November 21, 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 Deutscher Aktienindex DAX 40
Munich RE is listed as a top 10 stock on November 21, 2024 in the market index DAX 40 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Munich RE on November 21, 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 | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 17 |
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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 half of the metrics below and half above average for Munich RE. The consolidated Growth Rank has a good rank of 63, 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 63% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 100 which 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. But the consolidated Value Rank has a less desirable rank of 36 which means that the share price of Munich RE is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 64% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 17, which means that professional investors are more pessimistic about the stock than for 83% of alternative investment opportunities. ...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 only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 63), and the company is safely financed (Safety Rank of 100). However, professional market sentiment is low(Sentiment Rank of 17). The negative market view on Munich RE may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Munich RE negative
ANALYSIS: With an Obermatt Sentiment Rank of 17 (better than 17% compared with alternatives), overall professional sentiment and engagement for the stock Munich RE is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Munich RE. Analyst Opinions are at a rank of 30 (worse than 70% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 18, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 46, which means that professional investors hold less stock in this company than in 54% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Munich RE is Market Pulse, with a rank of 65, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 65% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 17 (less encouraging than 83% compared with investment alternatives), Munich RE has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Munich RE Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% 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 the majority of metrics are below, and only one is above average for Munich RE. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than 59% of comparable companies, indicating a good value concerning to Munich RE's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 17, meaning that dividends are expected to be lower than for 83% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 66% of alternatives (only 34% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a hold recommendation based on Munich RE's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Munich RE could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Munich RE looks like an expensive investment today. ...read more
Growth Strategy: Munich RE Growth Momentum good
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 34 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 67 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 69 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 55 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 63 |
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ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Munich RE shows an above-average growth dynamic in its industry. Investors also speak of positive 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 67 which means that currently professionals expect the company to grow its profits more than 67% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 69, and Stock Returns has a rank of 55 which means that the stock returns have recently been above 55% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 34 (66% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, 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 | November 21, 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 | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 63 |
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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 36 (worse than 64% of alternatives). But they show above-average growth (Growth Rank of 63) 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 36), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 63). 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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