July 25, 2024
Top 10 Stock SpareBank 1 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: SpareBank 1 – Top 10 Stock in SDG 13: Climate Action
SpareBank 1 is listed as a top 10 stock on July 25, 2024 in the market index SDG 13 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 73 (high 73% performer), Obermatt assesses an overall buy recommendation for SpareBank 1 on July 25, 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 SpareBank 1 Buy
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 56 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| SENTIMENT | ||||||||
| SENTIMENT | 98 |
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| 360° VIEW | ||||||||
| 360° VIEW | 73 |
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ANALYSIS: With an Obermatt 360° View of 73 (better than 73% compared with alternatives), overall professional sentiment and financial characteristics for the stock SpareBank 1 are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for SpareBank 1. The consolidated Growth Rank has a good rank of 56, 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 56% of competitors in the same industry. The consolidated Safety Rank at 52 means that the company has a financing structure that is safer than 52% 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 98, which means that professional investors are more optimistic about the stock than for 98% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 28, meaning that the share price of SpareBank 1 is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 72% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 73, SpareBank 1 is better positioned than 73% 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 56), a safe financing structure (Safety Rank of 52), and positive professional market sentiment (Sentiment Rank of 98), 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 SpareBank 1 compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (56% better than peers). The value rank could be the reverse reflection of that (44%). 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 SpareBank 1 very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock SpareBank 1 is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SpareBank 1. Analyst Opinions are at a rank of 49 (worse than 51% 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 72, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in SpareBank 1. Even better, the Professional Investors rank is 92, meaning that professional investors hold more stock in this company than in 92% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 93, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), SpareBank 1 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: SpareBank 1 Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), SpareBank 1 shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for SpareBank 1. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 73% 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 43 which means that the stock price compared with what market professionals expect for future profits is higher than 57% of comparable companies, indicating a low value concerning SpareBank 1'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 24 is also low. Compared with invested capital, the stock price is higher than for 76% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 28, is a hold recommendation based on SpareBank 1's stock price compared with the company's operational size and dividend yields. Should dividend investors pick SpareBank 1? 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 SpareBank 1 only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: SpareBank 1 Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 56 (better than 56% compared with alternatives), SpareBank 1 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 three out of four metrics below average for SpareBank 1. While Profit Growth has a good rank of 93, as professionals currently expect the company to grow its profits more than 93% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 33, which means that currently professionals expect the company to grow less than 67% of its competitors, while Capital Growth has a rank of 43 and Stock Returns have been below market median, with a rank of 44 (56% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 56, is a buy 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: SpareBank 1 Debt Financing Safety above-average
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 28 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 86 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 52 |
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ANALYSIS: With an Obermatt Safety Rank of 52 (better than 52% compared with alternatives), the company SpareBank 1 has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of SpareBank 1 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 just one indicator above average for SpareBank 1. Liquidity is at 86, meaning the company generates more profit to service its debt than 86% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 37, 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 63% of its competitors. Leverage is also high at a rank of 28, which means that the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 52 (better than 52% compared with alternatives), SpareBank 1 has a financing structure that is safer 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: SpareBank 1 Below-Average Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 56 |
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| SAFETY | ||||||||
| SAFETY | 86 |
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| COMBINED | ||||||||
| COMBINED | 34 |
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ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), SpareBank 1 (Regional Banks, Norway) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SpareBank 1 are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives). But they show above-average growth (Growth Rank of 56) and are safely financed (Safety Rank of 52, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on SpareBank 1's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company SpareBank 1 exhibits low value (Obermatt Value Rank of 28), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 56). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 52) 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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