September 19, 2024
Top 10 Stock Nomad Foods 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: Nomad Foods – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Nomad Foods is listed as a top 10 stock on September 19, 2024 in the market index SDG 17 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. Based on the Obermatt 360° View of 58 (high 58% performer), Obermatt assesses an overall buy recommendation for Nomad Foods on September 19, 2024.
Snapshot: Obermatt Ranks
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 Nomad Foods Buy
| 360 METRICS | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 89 |
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| 360° VIEW | ||||||||
| 360° VIEW | 58 |
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ANALYSIS: With an Obermatt 360° View of 58 (better than 58% compared with alternatives), overall professional sentiment and financial characteristics for the stock Nomad Foods are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Nomad Foods. The consolidated Value Rank has an attractive rank of 53, which means that the share price of Nomad Foods is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 53% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 65, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 89. But the company’s financing is risky with a Safety rank of 14. This means 86% of comparable companies have a safer financing structure than Nomad Foods. ...read more
RECOMMENDATION: With a consolidated 360° View of 58, Nomad Foods is better positioned than 58% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 53), above-average growth (Growth Rank of 65), and positive market sentiment in the professional investor community (Sentiment Rank of 89), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 14), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Nomad Foods is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Nomad Foods very positive
ANALYSIS: With an Obermatt Sentiment Rank of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Nomad Foods is very positive.
RECOMMENDATION: With a consolidated Sentiment Rank of 89 (more positive than 89% compared with investment alternatives), Nomad Foods has a reputation among professional investors that is significantly higher than that of its competitors.
Value Strategy: Nomad Foods Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 53 (better than 53% compared with alternatives), Nomad Foods shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Nomad Foods. Price-to-Sales (P/S) is 51, which means that the stock price compared with what market professionals expect for future sales is lower than for 51% of comparable companies, indicating a good value regarding Nomad Foods's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 85% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 67. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Nomad Foods (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 53, is a buy recommendation based on Nomad Foods's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Nomad Foods Growth Momentum good
| GROWTH METRICS | September 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 35 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 42 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 87 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 73 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 65 |
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ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Nomad Foods 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 half of the indicators below and half above average for Nomad Foods. Capital Growth has a rank of 87, which means that currently professionals expect the company to grow its invested capital more than 42% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 73 (above 73% of alternative investments). But Sales Growth has only a rank of 35, which means that, currently, professionals expect the company to grow less than 65% of its competitors, and Profit Growth is also low at a rank of 42. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Nomad Foods, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Nomad Foods Debt Financing Safety risky
| SAFETY METRICS | September 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 29 |
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| REFINANCING | ||||||||
| REFINANCING | 36 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 18 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company Nomad Foods 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 Nomad Foods 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 Nomad Foods. 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 29, meaning the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. Finally, Refinancing is at a rank of 36 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), Nomad Foods 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.
Combined financial peformance: Nomad Foods Below-Average Financial Performance
| COMBINED PERFORMANCE | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 53 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 18 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), Nomad Foods (Packaged Foods & Meats, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Nomad Foods are a good value (attractively priced) with a consolidated Value Rank of 53 (better than 53% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 32, is a hold recommendation based on Nomad Foods's financial characteristics. As the company Nomad Foods's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 53) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 14) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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