June 20, 2024
Top 10 Stock Valmet 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: Valmet – Top 10 Stock in Human Rights Leaders
Valmet is listed as a top 10 stock on June 20, 2024 in the market index Human Rights because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 52 (high 52% performer), Obermatt assesses an overall buy recommendation for Valmet on June 20, 2024.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Industrial Machinery |
| Index | OMX 25, Dividends Europe, Human Rights |
| 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 Valmet Buy
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 52 |
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ANALYSIS: With an Obermatt 360° View of 52 (better than 52% compared with alternatives), overall professional sentiment and financial characteristics for the stock Valmet are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Valmet. The consolidated Value Rank has an attractive rank of 82, which means that the share price of Valmet is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 82% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 58. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 51. But the consolidated Growth Rank has a low rank of 3, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 97 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 52, Valmet is better positioned than 52% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 82), secure financing practices (Safety Rank of 58), and positive market sentiment in the professional investor community (Sentiment Rank of 51). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 3), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Valmet is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Valmet positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Valmet is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Valmet. Analyst Opinions are at a rank of 61 (better than 61% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 54, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 54% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 28, which means that currently, professional investors hold less stock in this company than in 72% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Valmet has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in Valmet may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Valmet. ...read more
Value Strategy: Valmet Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 82 (better than 82% compared with alternatives) for 2024, Valmet shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Valmet. Price-to-Sales is 58 which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value for Valmet's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 75% 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 67. Compared with other companies in the same industry, dividend yields of Valmet are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 82, is a buy recommendation based on Valmet'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 Valmet based on its detailed value metrics.
Growth Strategy: Valmet Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Valmet 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 all four metrics below average for Valmet. Sales Growth has a rank of 1, which means that currently professionals expect the company to grow less than 99% of its competitors. The same is valid for Profit Growth, with a rank of 22, and Capital Growth with 36. In addition, Stock Returns have a below market rank of 17, which means that the stock returns have recently been below 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Valmet Debt Financing Safety above-average
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 43 |
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| REFINANCING | ||||||||
| REFINANCING | 52 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
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ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Valmet 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 Valmet 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 Valmet. Refinancing is at 52, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 52% 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 43, which means the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 58 (better than 58% compared with alternatives), Valmet 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 Valmet 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: Valmet Below-Average Financial Performance
| COMBINED PERFORMANCE | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 82 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Valmet (Industrial Machinery, Finland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Valmet are a good value (attractively priced) with a consolidated Value Rank of 82 (better than 82% of alternatives), are safely financed (Safety Rank of 58, which means low debt burdens), but show below-average growth (Growth Rank of 3). ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Valmet's financial characteristics. As the company Valmet's key financial metrics exhibit good value (Obermatt Value Rank of 82) but low growth (Obermatt Growth Rank of 3) while being safely financed (Obermatt Safety Rank of 58), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 82% 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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