October 5, 2023

Sulzer for its growth momentum and biofuels

Sulzer for its growth momentum and biofuels

If you’re following our newsletter and our stock tips, you may already know that the first financial product based on the Obermatt method launched: the ETP on the Obermatt Swiss Pearls Index. Now, if you are trading in Switzerland and want to complement your stock portfolio with 36 of the best performing Swiss stocks using our 360° View, you can invest directly into our ETP.

This week, however, we’re continuing to review the most recent additions to our Wikifolios with Sulzer: a Swiss industrial engineering and manufacturing company for the Swiss Value Wikifolio. Let’s review in detail why we chose this company.

PRO: These three points speak for a buy:

  1. Good Obermatt ranks, especially Value and Growth, which is at 99 - meaning that Sulzer has one of the biggest growth momentums across the industry.
  2. Their pumps division will enable biofuels production across Brazil at 20 new Raízen’s plants. They produce ethanol from the fermentation of crop wastes. Also, Sulzer’s separation technology makes end-of-life plastics recycling possible in Antwerp.
  3. Their recent price hike has brought significant gains to investors. However, the stock price is still fairly priced, which the Obermatt Value rank confirms.

CONTRA: The following three points argue against it:

  1. A relatively bad Sentiment Rank of 30 due to a red Pro Holdings Rank: this means that the number of professional investors in the company is low compared to the competition. On the other hand, Market Pulse is 87: the news on the company is very good.
  2. We gave Sulzer a Leverage Rank of 9, meaning that the company has an above-average debt-to-equity ratio, with a debt higher than 91% of its competitors.
  3. Investing in industrials can be risky at times, because the industry tends to struggle when the economy is contracting: companies usually hold off investing in new equipment at this time. However, as Sulzer’s clients are also producers of renewable energy, biofuels and recycling plants, we think this may not be an issue, because those sectors are currently flourishing and will continue to.

We believe we’ve made the correct decision by including Sulzer in our Swiss Value Wikifolio. We like their products and the fact that they help the production of ecologically acceptable fuels.

If you want to be the one who decides on the future of our Wikifolios and have your opinion heard, while also learning about stock investing, join our free Coffee Break Zoom Chats. Also, if you’re not certain single stock buys are for you, take a look at the new ETP: Obermatt Swiss Pearls Index traded on the SIX Swiss stock exchange.

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