The Value Rank helps you cut through the hype and assess whether a company is attractively priced compared to its peers. A Value Rank of 75 means the company is valued cheaper than 75% of similar companies. A high Value Rank suggests that the stock may be undervalued; the market might not yet fully appreciate the company’s future potential. In contrast, a low Value Rank often means the stock is priced like a trending item: popular, in demand, and expensive. But like fashion trends, popularity doesn’t always last. Ask yourself: Is this price driven by lasting quality, or temporary hype? That said, a low rank doesn't always mean a bad investment, just as a high rank doesn't guarantee success. Use the Value Rank as a first filter, not a final answer. Combine it with other Obermatt metrics like Growth, Safety, and Sentiment to understand the whole story behind a stock’s price.
The Value Rank is a valuable starting point for identifying potentially undervalued stocks, but it should never be used in isolation. A company with a high Value Rank might appear cheap relative to its peers, but this doesn’t automatically make it a good investment. Sometimes, a low stock price reflects real and justified concerns, such as weak management, declining business fundamentals, or structural industry problems. On the other hand, a company with a low Value Rank might appear expensive, but strong brand recognition, superior margins, market leadership, or sustained growth potential could justify its higher valuation. In other words, price alone doesn’t determine value; the context behind the price matters just as much.
Instead of aiming only for high ranks, look for balance and consistency across multiple dimensions. A company with a solid Value Rank and strong performance in other Obermatt ranks, such as Growth, Safety, or Sentiment, presents a more well-rounded investment profile. If these ranks have remained stable or improved over time, it suggests that the company isn’t just temporarily performing well but has built-in strengths and resilience. This kind of consistency is often a sign of a reliable, well-managed business rather than a stock that's riding a short-term trend. In contrast, a stock that ranks highly in value but poorly in growth and sentiment may be cheap for a reason; perhaps because the business model is outdated, investor confidence is low, or future prospects are limited.
Additionally, consider the company’s history. If a firm consistently shows a high Value Rank, it's worth digging deeper to understand why. Has the market repeatedly overlooked it due to short-term issues or poor communication? Or is the company stuck in a difficult position, such as an industry with stagnant growth or poor capital allocation, leading to persistent undervaluation? Consistent undervaluation could mean opportunity, or it could be a red flag. The key is to investigate what’s behind the numbers: are you seeing untapped potential, or ongoing struggles?
Finally, keep in mind that a high Value Rank often signals contrarian opportunities, situations where the market’s sentiment does not align with the company’s underlying fundamentals. In these cases, you are essentially betting that the market has misjudged the company’s true worth, perhaps due to temporary setbacks, negative news cycles, or general pessimism. While this kind of investing can lead to outsized returns, it also requires discipline, patience, and the ability to look past the crowd’s opinion. It's not just about buying what's cheap, it's about buying what others will eventually recognize as valuable. That takes courage and careful analysis.
In summary, use the Value Rank to filter and prioritize ideas, but don’t stop there. Look beyond the price tag to understand why the stock is ranked as it is. Combine Value with the other Obermatt Ranks, investigate the company’s history and consistency, and think independently. That’s how you move from a basic valuation screen to a thoughtful, well-informed investment decision.
The Value Rank you see is a combined score that reflects a company’s overall valuation across four individual value ranks: Price vs. Sales, Price vs. Earnings, Price vs. Book, and Dividend Yield. Each of these individual ranks highlights a different way to measure a company's value. Obermatt calculates the consolidated Value Rank by averaging all four individual ranks. This averaging process smooths out distortions that may exist in any single metric, providing a more comprehensive and balanced view.
However, the process doesn't end there. To ensure the score is meaningful, this average is then compared against the averages of other companies in the same group or industry. The result is a relative rank between 1 and 100: the company with the best overall value compared to its peers receives a Value Rank of 100. In contrast, the one with the least attractive valuation gets a rank of 1. All others fall somewhere in between. This makes the Value Rank not just a reflection of a company’s value position, but a percentile-based comparison that shows how a stock stacks up in the broader market. In essence, it's a quick and powerful way to understand a company’s value across multiple dimensions, all at once.
We use the share price at the end of the period and the profit during the preceding period. The higher this ratio relative to peers, the lower the rank.
Defined as:
MV of Equity
Profit
We use the share price and the book values at the end of the period. The higher this ratio relative to peers, the lower the rank.
Defined as:
MV of Equity
BV of Equity
We use the share price at the end of the period and the sales figures during the preceding period. The higher this ratio relative to peers, the lower the rank.
Defined as:
MV of Equity
Sales
We use the share price from the end of the period and dividend pay-outs during the preceding period. The higher this value relative to peers, the higher the rank.
Defined as:
Dividends
MV of Equity
MV = Market Value ; BV = Book Value
Measures a company’s financial strength based on debt levels, liquidity, and capital structure. Higher ranks signal lower financial risk.
Tracks how fast a company is expanding across key metrics like revenue, profits, and assets compared to its peers.
Evaluates how attractively a company is priced using valuation metrics like earnings, sales, book value, and dividends relative to competitors.
Provides a balanced score that merges Value, Growth, and Safety Ranks for a well-rounded view of a company's financial performance.
Reflects market perception by analyzing investor behavior and recent stock performance relative to peers.
Offers a holistic rating that combines all key Obermatt Ranks: Value, Growth, Safety, and Sentiment for a comprehensive company assessment.
The higher, the better. For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. These ranks are percentiles: a rank of 75 means the company outperforms 75% of its peers in that specific area. The higher the rank, the better the stock stacks up against its peers.
