November 7, 2024
Top 10 Stock UPM 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: UPM – Top 10 Stock in Optionsmäklarna Helsinki Stock Exchange Helsinki Index OMX 25
UPM is listed as a top 10 stock on November 07, 2024 in the market index OMX 25 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 safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 38 (38% performer), Obermatt assesses an overall hold recommendation for UPM on November 07, 2024.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Paper Products |
| Index | OMX 25, Low Emissions, Customer Focus EU, Employee Focus EU, Energy Efficient, Human Rights, Low Waste, Nuclear, Recycling, Timber Industry |
| 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 UPM Hold
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 14 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| SENTIMENT | ||||||||
| SENTIMENT | 36 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% compared with alternatives), overall professional sentiment and financial characteristics for the stock UPM are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for UPM. The only rank that is above average is the consolidated Safety Rank at 78, which means that the company has a financing structure that is safer than those of 78% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 40, which means that the share price of UPM is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 14, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 36, which means that professional investors are more pessimistic about the stock than for 64% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 38, UPM is worse than 62% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 36. The negative market view on UPM may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. 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. 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 UPM only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 36 (better than 36% compared with alternatives), overall professional sentiment and engagement for the stock UPM is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for UPM. Analyst Opinions are at a rank of 42 (worse than 58% 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 6, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 34, which means that professional investors hold less stock in this company than in 66% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for UPM is Market Pulse, with a rank of 67, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 67% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 36 (less encouraging than 64% compared with investment alternatives), UPM has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: UPM Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), UPM 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 UPM. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 88% 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 17 which means that the stock price compared with what market professionals expect for future profits is higher than 83% of comparable companies, indicating a low value concerning UPM's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 40 which means that the stock price compared with what market professionals expect for future profit levels is higher than 60% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 40 is also low. Compared with invested capital, the stock price is higher than for 60% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on UPM's stock price compared with the company's operational size and dividend yields. Should dividend investors pick UPM? 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 UPM only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: UPM Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 14 (better than 14% compared with alternatives), UPM shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for UPM. While Profit Growth has a good rank of 62, as professionals currently expect the company to grow its profits more than 62% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 25, which means that currently professionals expect the company to grow less than 75% of its competitors, while Capital Growth has a rank of 29 and Stock Returns have been below market median, with a rank of 24 (76% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 14, is a sell 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: UPM Debt Financing Safety very solid
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 73 |
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| REFINANCING | ||||||||
| REFINANCING | 30 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 88 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 78 |
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ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company UPM has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of UPM 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 UPM. Leverage is at a rank of 73, meaning the company has a below-average debt-to-equity ratio. It has less debt than 73% of its competitors. Liquidity is also good at a rank of 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 30, 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 70% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), UPM has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for UPM. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: UPM Below-Average Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 14 |
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| SAFETY | ||||||||
| SAFETY | 88 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), UPM (Paper Products, Finland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of UPM are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives) and show below-average growth (Growth Rank of 14) but are safely financed (Safety Rank of 78), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on UPM's financial characteristics. As the company UPM's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 40) and low growth (Obermatt Growth Rank of 14), 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 78) 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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