January 18, 2024
Top 10 Stock SalMar Hold 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: SalMar – Top 10 Stock in Sound Pay Practices in Europe
SalMar is listed as a top 10 stock on January 18, 2024 in the market index Sound Pay Europe because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 36 (36% performer), Obermatt assesses an overall hold recommendation for SalMar on January 18, 2024.
Snapshot: Obermatt Ranks
| Country | Norway |
| Industry | Packaged Foods & Meats |
| Index | Diversity Europe, Renewables Users, Sound Pay Europe, OBX Index |
| Size class | 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 SalMar Hold
| 360 METRICS | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 98 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| SENTIMENT | ||||||||
| SENTIMENT | 29 |
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| 360° VIEW | ||||||||
| 360° VIEW | 36 |
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ANALYSIS: With an Obermatt 360° View of 36 (better than 36% compared with alternatives), overall professional sentiment and financial characteristics for the stock SalMar are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for SalMar. The consolidated Growth Rank has a good rank of 98, 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. It ranks higher than 98% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 19 means that the share price of SalMar is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 81% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 34, which means that the company has a riskier financing structure than 66% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 29, indicating professional investors are more pessimistic about the stock than for 71% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 36, SalMar is worse than 64% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 98), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 29), the company is rather risky when it comes to financing (Safety Rank of 34). The negative market view on SalMar 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 join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of SalMar compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one 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 (even though it is lower than 50). As market sentiment is critical, 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 SalMar only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock SalMar is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for SalMar. Analyst Opinions are at a rank of 37 (worse than 63% 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 19, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 9, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 91% of competitors). On the upside, the Professional Investors rank is 87, which means that professional investors hold more stock in this company than in 87% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 29 (less encouraging than 71% compared with investment alternatives), SalMar has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make SalMar stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: SalMar Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), SalMar shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for SalMar. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 62% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: 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 SalMar's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 30 which means that the stock price compared with what market professionals expect for future profit levels is higher than 70% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 13 is also low. Compared with invested capital, the stock price is higher than for 87% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on SalMar's stock price compared with the company's operational size and dividend yields. Should dividend investors pick SalMar? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose SalMar only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: SalMar Growth Momentum high
| GROWTH METRICS | January 18, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 100 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 86 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 50 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 100 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 98 |
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ANALYSIS: With an Obermatt Growth Rank of 98 (better than 98% compared with alternatives) for 2024, SalMar 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 four indicators above average for SalMar. Sales Growth has a value of 100, which means that, currently, professionals expect the company to grow more than 100% of its competitors. The same is valid for Profit Growth with a value of 86 and for Capital Growth with 50. In addition, Stock Returns had an above-average rank value of 100, which means they have been higher than 100% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 98, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, SalMar exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: SalMar Debt Financing Safety below-average
| SAFETY METRICS | January 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 17 |
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| REFINANCING | ||||||||
| REFINANCING | 44 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 66 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 34 |
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ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company SalMar has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of SalMar 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 just one indicator above average for SalMar. Liquidity is at 66, meaning the company generates more profit to service its debt than 66% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 44, 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 56% of its competitors. Leverage is also high at a rank of 17, which means that the company has an above-average debt-to-equity ratio. It has more debt than 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), SalMar has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: SalMar Below-Average Financial Performance
| COMBINED PERFORMANCE | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 19 |
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| GROWTH | ||||||||
| GROWTH | 98 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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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), SalMar (Packaged Foods & Meats, Norway) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SalMar are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 98). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on SalMar's financial characteristics. As the company SalMar shows low value with an Obermatt Value Rank of 19 (81% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 98% of comparable companies (Obermatt Growth Rank is 98). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 34 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for SalMar, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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