September 28, 2023
Top 10 Stock Altium Strong Buy Recommendation

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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 Altium Strong Buy

360 METRICS	September 28, 2023
VALUE
VALUE	37
GROWTH
GROWTH	73
SAFETY
SAFETY	98
SENTIMENT
SENTIMENT	53
360° VIEW
360° VIEW	85

ANALYSIS: With an Obermatt 360° View of 85 (better than 85% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Altium are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Altium. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 73% of competitors in the same industry. The consolidated Safety Rank at 98 means that the company has a financing structure that is safer than 98% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 53, which means that professional investors are more optimistic about the stock than for 53% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 37, meaning that the share price of Altium is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 63% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 85, Altium is better positioned than 85% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 73), a safe financing structure (Safety Rank of 98), and positive professional market sentiment (Sentiment Rank of 53), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Altium compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (73% better than peers). The value rank could be the reverse reflection of that (27%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Altium positive

SENTIMENT METRICS	September 28, 2023
ANALYST OPINION
ANALYST OPINION	9
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	94
MARKET PULSE
MARKET PULSE	46
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	53

ANALYSIS: With an Obermatt Sentiment Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock Altium is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Altium. Analyst Opinions are at a rank of 9 (worse than 91% 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 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Altium. More encouragingly, the Professional Investors rank is 94, which means that professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 46, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 54% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 53 (more positive than 53% compared with investment alternatives), Altium has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Altium. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more

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Value Strategy: Altium Stock Price Value below-average critical

VALUE METRICS	September 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	30
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	24
DIVIDEND YIELD
DIVIDEND YIELD	90
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	37

ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Altium shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Altium. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 90% 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 is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Altium's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 30 which means that the stock price compared with what market professionals expect for future profit levels is higher than 70% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 24 is also low. Compared with invested capital, the stock price is higher than for 76% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Altium's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Altium? 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 Altium only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: Altium Growth Momentum good

GROWTH METRICS	September 28, 2023
REVENUE GROWTH
REVENUE GROWTH	74
PROFIT GROWTH
PROFIT GROWTH	46
CAPITAL GROWTH
CAPITAL GROWTH	60
STOCK RETURNS
STOCK RETURNS	61
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	73

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Altium shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Altium. Sales Growth has a rank of 74 which means that currently, professionals expect the company to grow more than 74% of its competitors. Capital Growth is also above 46% of competitors with a rank of 60, and Stock Returns with the rank of 61 is also an outperformance. Only Profit Growth is low with a rank of 46 which means that currently, professionals expect the company to grow its profits less than 54% of its competitors. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Altium is a good growth stock. ...read more

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Safety Strategy: Altium Debt Financing Safety very solid

SAFETY METRICS	September 28, 2023
LEVERAGE
LEVERAGE	74
REFINANCING
REFINANCING	41
LIQUIDITY
LIQUIDITY	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	98

ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2023, the company Altium has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Altium 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 Altium. Leverage is at a rank of 74, meaning the company has a below-average debt-to-equity ratio. It has less debt than 74% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 41, 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 59% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Altium has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Altium. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more

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Combined financial peformance: Altium Top Financial Performance

COMBINED PERFORMANCE	September 28, 2023
VALUE
VALUE	37
GROWTH
GROWTH	73
SAFETY
SAFETY	100
COMBINED
COMBINED	88

ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Altium (Application Software, USA) shares have much better financial characteristics than comparable stocks. Shares of Altium are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 98, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Altium's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Altium exhibits low value (Obermatt Value Rank of 37), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 98) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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