June 15, 2023
Top 10 Stock Demant Sell 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: Demant – Top 10 Stock in OMX Copenhagen 20
Demant is listed as a top 10 stock on June 15, 2023 in the market index OMX C20 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 10 (10% performer), Obermatt issues an overall sell recommendation for Demant on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | Denmark |
| Industry | Health Care Equipment |
| Index | OMX C20, Employee Focus EU, 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 Demant Sell
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 10 |
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ANALYSIS: With an Obermatt 360° View of 10 (better than 10% compared with alternatives), overall professional sentiment and financial characteristics for the stock Demant are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Demant. The consolidated Sentiment Rank has a good rank of 51, which means that professional investors are more optimistic about the stock than for 51% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 29, which means that the share price of Demant is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 37, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 37% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 6 which means that the company has a riskier financing structure than 94% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 10, Demant is worse than 90% of all alternative stock investment opportunities based on the Obermatt Method. This means that Demant shares are on the riskier side for investors. As only the professional market sentiment (Sentiment Rank of 51) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Demanṭ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Demant positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Demant is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Demant. Analyst Opinions are at a rank of 15 (worse than 85% 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 79 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Demant. Market Pulse is also positive with a rank of 70, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 70% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 36, which means that professional investors hold less stock in this company than in 64% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Demant has a reputation among professional investors that is above-average compared with that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Demant Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Demant shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Demant. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than 50% of comparable companies, indicating a good value concerning to Demant's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 32, meaning that dividends are expected to be lower than for 68% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 85% of alternatives (only 15% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 74% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 29, is a HOLD recommendation based on Demant's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Demant could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Demant looks like an expensive investment today. ...read more
Growth Strategy: Demant Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Demant 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 metrics below average for Demant. While Profit Growth has a good rank of 75, as professionals currently expect the company to grow its profits more than 75% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 41, which means that currently professionals expect the company to grow less than 59% of its competitors, while Capital Growth has a rank of 18 and Stock Returns have been below market median, with a rank of 45 (55% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a HOLD 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: Demant Debt Financing Safety risky
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 7 |
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| REFINANCING | ||||||||
| REFINANCING | 4 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
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ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company Demant has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Demant is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Demant. Liquidity is at 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 4, 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 96% of its competitors. Leverage is also high at a rank of 7, which means that the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 6 (worse than 94% compared with alternatives), Demant has a financing structure that is significantly riskier 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: Demant Lowest Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 1 |
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ANALYSIS: With an Obermatt Combined Rank of 1 (worse than 99% compared with investment alternatives), Demant (Health Care Equipment, Denmark) shares have lower financial characteristics compared with similar stocks. Shares of Demant are low in value (priced high) with a consolidated Obermatt Value Rank of 29 (worse than 71% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 1, is a sell recommendation based on Demant's financial characteristics. As the company Demant's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 29), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 6), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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