June 22, 2023
Top 10 Stock Ube 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: Ube – Top 10 Stock in Nikkei 225 Index
Ube is listed as a top 10 stock on June 22, 2023 in the market index Nikkei 225 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 39 (39% performer), Obermatt assesses an overall hold recommendation for Ube on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Diversified Chemicals |
| Index | Low Emissions, Nikkei 225 |
| Size class | X-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 Ube Hold
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| SENTIMENT | ||||||||
| SENTIMENT | 7 |
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| 360° VIEW | ||||||||
| 360° VIEW | 39 |
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ANALYSIS: With an Obermatt 360° View of 39 (better than 39% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ube are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Ube. The consolidated Value Rank has an attractive rank of 89, which means that the share price of Ube 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 89% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 56. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 7. Professional investors are more confident in 93% other stocks. The consolidated Growth Rank also has a low rank of 45, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 39, Ube is worse than 61% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 89), and the financing structure is on the safer side (Safety Rank of 56). However, sentiment in the professional investor community is below-average (Sentiment Rank of 7), as is the growth momentum for the company (Growth Rank of 45). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Ube negative
ANALYSIS: With an Obermatt Sentiment Rank of 7 (better than 7% compared with alternatives), overall professional sentiment and engagement for the stock Ube is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Ube. Analyst Opinions are at a rank of 23 (worse than 77% 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 means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Ube. But the Professional Investors rank is low at 19, which means that professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 15, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 85% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 7 (less encouraging than 93% compared with investment alternatives), Ube has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Ube Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 89 (better than 89% compared with alternatives) for 2023, Ube shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Ube. Price-to-Sales is 76 which means that the stock price compared with what market professionals expect for future sales is lower than for 76% of comparable companies, indicating a good value for Ube's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 63% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 86. Compared with other companies in the same industry, dividend yields of Ube are expected to be higher than for 89% of all competitors (a Dividend Yield rank of 89). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 89, is a strong buy recommendation based on Ube's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Ube based on its detailed value metrics.
Growth Strategy: Ube Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Ube 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 three out of four indicators below average for Ube. Sales Growth has a below market rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors. The same is valid for Capital Growth, with a rank of 38, and Profit Growth, with a rank of 6. Currently, professionals expect the company to grow its profits less than 94% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 83, which means that the stock returns have recently been above 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 45, is a HOLD recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Ube, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Ube Debt Financing Safety above-average
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 37 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 56 |
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ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Ube 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 Ube 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 Ube. Refinancing is at 55, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. Liquidity is also good at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 37, which means the company has an above-average debt-to-equity ratio. It has more debt than 63% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), Ube has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Ube could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Ube Top Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 75 |
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ANALYSIS: With an Obermatt Combined Rank of 75 (better than 75% compared with investment alternatives), Ube (Diversified Chemicals, Japan) shares have much better financial characteristics than comparable stocks. Shares of Ube are a good value (attractively priced) with a consolidated Obermatt Value Rank of 89 (better than 89% of alternatives), are safely financed (Safety Rank of 56, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 75, is a strong buy recommendation based on Ube's financial characteristics. As the company Ube's key financial metrics exhibit good value (Obermatt Value Rank of 89) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 56), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 89% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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