August 31, 2023
Top 10 Stock BASF 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: BASF – Top 10 Stock in Deutscher Aktienindex DAX 40
BASF is listed as a top 10 stock on August 31, 2023 in the market index DAX 40 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 67 (high 67% performer), Obermatt assesses an overall buy recommendation for BASF on August 31, 2023.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Diversified Chemicals |
| Index | CDAX, DAX 40, EURO STOXX 50, Low Emissions, Dividends Europe, Energy Efficient, Diversity Europe, Human Rights, Water Efficiency |
| Size class | XX-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 BASF Buy
| 360 METRICS | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 67 |
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ANALYSIS: With an Obermatt 360° View of 67 (better than 67% compared with alternatives), overall professional sentiment and financial characteristics for the stock BASF are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for BASF. The consolidated Value Rank has an attractive rank of 87, which means that the share price of BASF is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 87% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 65, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 18. Professional investors are more confident in 82% other stocks. Worryingly, the company has risky financing, with a Safety rank of 49. This means 51% of comparable companies have a safer financing structure than BASF. ...read more
RECOMMENDATION: With a consolidated 360° View of 67, BASF is better positioned than 67% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 87 and the Growth Rank above-average at 65, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 18. In addition, the company financing structure is on the riskier side (Safety Rank of 49). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for BASF negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock BASF is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for BASF. Analyst Opinions are at a rank of 25 (worse than 75% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 16, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 22, which means that professional investors hold less stock in this company than in 78% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for BASF is Market Pulse, with a rank of 58, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 58% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), BASF has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: BASF Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2023, BASF shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for BASF. Price-to-Sales is 76 which means that the stock price compared with what market professionals expect for future sales is lower than for 76% of comparable companies, indicating a good value for BASF's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 76% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 64. Compared with other companies in the same industry, dividend yields of BASF are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on BASF's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in BASF based on its detailed value metrics.
Growth Strategy: BASF Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), BASF 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 half of the indicators below and half above average for BASF. Capital Growth has a rank of 88, which means that currently professionals expect the company to grow its invested capital more than 27% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 77 (above 77% of alternative investments). But Sales Growth has only a rank of 26, which means that, currently, professionals expect the company to grow less than 74% of its competitors, and Profit Growth is also low at a rank of 27. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for BASF, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: BASF Debt Financing Safety below-average
| SAFETY METRICS | August 31, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company BASF has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of BASF 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 where two out of three are above average for BASF.Leverage is at 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors.Refinancing is at a rank of 69, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Liquidity is at 27, meaning that the company generates less profit to service its debt than 73% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), BASF has a financing structure that is riskier than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: BASF Top Financial Performance
| COMBINED PERFORMANCE | August 31, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), BASF (Diversified Chemicals, Germany) shares have much better financial characteristics than comparable stocks. Shares of BASF are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives), show above-average growth (Growth Rank of 65) but are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on BASF's financial characteristics. As the company BASF's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 87) and above-average growth (Obermatt Growth Rank of 65), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 49) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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