June 29, 2023
Top 10 Stock Stabilus 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: Stabilus – Top 10 Stock in Deutscher Aktienindex Small Cap SDAX
Stabilus is listed as a top 10 stock on June 29, 2023 in the market index SDAX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 66 (high 66% performer), Obermatt assesses an overall buy recommendation for Stabilus on June 29, 2023.
Snapshot: Obermatt Ranks
| Country | Luxembourg |
| Industry | Industrial Machinery |
| Index | Human Rights, Sound Pay Europe, SDAX |
| 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 Stabilus Buy
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 66 |
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ANALYSIS: With an Obermatt 360° View of 66 (better than 66% compared with alternatives), overall professional sentiment and financial characteristics for the stock Stabilus are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Stabilus. The consolidated Sentiment Rank has a good rank of 92, which means that professional investors are more optimistic about the stock than for 92% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 62 or better than 62% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 48, meaning that the share price of Stabilus is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 29. ...read more
RECOMMENDATION: With a consolidated 360° View of 66, Stabilus is better positioned than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 92) and safe financing practices (Safety Rank of 62), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Stabiluṣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Stabilus very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Stabilus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Stabilus. Analyst Opinions are at a rank of 44 (worse than 56% 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 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Stabilus. Even better, the Professional Investors rank is 97, meaning that professional investors hold more stock in this company than in 97% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Stabilus 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: Stabilus Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Stabilus 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 above average for Stabilus. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning Stabilus's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 55, and for Dividend Yield with a Dividend Yield Rank of 61. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 66% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 34). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Stabilus's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Stabilus has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Stabilus shares. ...read more
Growth Strategy: Stabilus Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Stabilus shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Stabilus. Sales Growth has a rank of 61 which means that currently professionals expect the company to grow more than 61% of its competitors. Stock Returns are also above average with a rank of 53. But Capital Growth has only a rank of 27, which means that currently professionals expect the company to grow its invested capital less than 73% of its competitors. Profit Growth is also low, with a rank of only 23, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 53% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Stabilus Debt Financing Safety above-average
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 59 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 62 |
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ANALYSIS: With an Obermatt Safety Rank of 62 (better than 62% compared with alternatives), the company Stabilus 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 Stabilus 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 where two out of three are above average for Stabilus.Leverage is at 59, meaning the company has a below-average debt-to-equity ratio. It has less debt than 59% of its competitors.Refinancing is at a rank of 64, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Liquidity is at 46, meaning that the company generates less profit to service its debt than 54% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 62 (better than 62% compared with alternatives), Stabilus has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Stabilus Below-Average Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 29 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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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), Stabilus (Industrial Machinery, Luxembourg) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Stabilus are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives) and show below-average growth (Growth Rank of 29) but are safely financed (Safety Rank of 62), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Stabilus's financial characteristics. As the company Stabilus's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 48) and low growth (Obermatt Growth Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 62) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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