May 11, 2023
Top 10 Stock Amorim 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: Amorim – Top 10 Stock in Wood & Timber Industry
Amorim is listed as a top 10 stock on May 11, 2023 in the market index Timber Industry because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed, and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° Rank of 53 (high 53% performer), Obermatt assesses an overall buy recommendation for Amorim on May 11, 2023.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Metal & Glass Containers |
| Index | Low Emissions, Energy Efficient, Renewables Users, Sound Pay Europe, Timber Industry, PSI General, PSI 20 |
| Size class | 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° Assessment Amorim Buy
| 360 METRICS | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 53 |
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ANALYSIS: With an Obermatt 360° Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock Amorim are above average. The 360° Rank is based on consolidating four consolidated indicators, with half below and half above average for Amorim. The consolidated Sentiment Rank has a good rank of 69, which means that professional investors are more optimistic about the stock than for 69% of alternative investment opportunities. It also rates well regarding its financing structure, wtih the consolidated Safety Rank at 92 or better than 92% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 15, meaning that the share price of Amorim is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 41. ...read more
RECOMMENDATION: With a 360° Rank of 53, Amorim is better than 53% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 69) and safe financing practices (Safety Rank of 92), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Inventors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Amoriṃ is bright. 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 Amorim positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock Amorim is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Amorim. Analyst Opinions are at a rank of 60 (better than 60% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Amorim. The Professional Investors rank is 67, which means that currently, professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 77 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 77% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), Amorim has a reputation among professional investors that is above-average compared with that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Amorim stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Amorim Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Amorim shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Amorim. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 57% 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 has a value of 21 which means that the stock price compared with what market professionals expect for future profits is higher than 79% of comparable companies, indicating a low value concerning Amorim's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 19 which means that the stock price compared with what market professionals expect for future profit levels is higher than 81% of comparable companies. In addition, Price-to-Book Capital (also referred to as market-to-book ratio) with an Obermatt Price-to-Book Rank of 18 is also low. Compared with invested capital, the stock price is higher than for 82% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a SELL recommendation based on Amorim's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Amorim? 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 Amorim only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Amorim Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Amorim 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 half of the indicators below and half above average for Amorim. Profit Growth has a rank of 77, which means that currently professionals expect the company to grow its profits more than 77% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has a below the median rank of 33, which means that, currently, professionals expect the company to grow less than 67% of its competitors, and Capital Growth also has a lower rank of 26. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a HOLD recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Amorim. ...read more
Safety Strategy: Amorim Debt Financing Safety very solid
| SAFETY METRICS | May 11, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 78 |
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| REFINANCING | ||||||||
| REFINANCING | 61 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
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ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2023, the company Amorim has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Amorim 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, where all three are above average for Amorim. Leverage is at 78, meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors. Refinancing is at a rank of 61, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. Finally, Liquidity is also good at a rank of 98, which means that the company generates more profit to service its debt than 98% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives), Amorim has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Amorim Above-Average Financial Performance
| COMBINED PERFORMANCE | May 11, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 50 |
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ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Amorim (Metal & Glass Containers, Portugal) shares have above-average financial characteristics compared with similar stocks. Shares of Amorim are low in value (priced high) with a consolidated Obermatt Value Rank of 15 (worse than 85% of alternatives) and show below-average growth (Growth Rank of 41) but are safely financed (Safety Rank of 92), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 50, is a buy recommendation based on Amorim's financial characteristics. As the company Amorim's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 15) and low growth (Obermatt Growth Rank of 41), 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 92) 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 are all in the future, stock investing becomes guesswork, and this should only be used in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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