December 21, 2023
Top 10 Stock Cochlear Hold 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: Cochlear – Top 10 Stock in Australian Securities Exchange Index ASX 100
Cochlear is listed as a top 10 stock on December 21, 2023 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for Cochlear on December 21, 2023.
Snapshot: Obermatt Ranks
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 Cochlear Hold
| 360 METRICS | December 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 10 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 57 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 43 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 41 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cochlear are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Cochlear. The consolidated Growth Rank has a good rank of 81, 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 81% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 57 which means that the company has a financing structure that is safer than 57% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 10 which means that the share price of Cochlear is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 90% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 43, which means that professional investors are more pessimistic about the stock than for 57% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 41, Cochlear is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 81), and the company is safely financed (Safety Rank of 57). However, professional market sentiment is low(Sentiment Rank of 43). The negative market view on Cochlear may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Cochlear compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Cochlear only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock Cochlear is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Cochlear. Analyst Opinions are at a rank of 3 (worse than 97% 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 67, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Cochlear. Even better, the Professional Investors rank is 63, meaning that professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 76, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 76% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 43 (less encouraging than 57% compared with investment alternatives), Cochlear has a reputation among professional investors that is below that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Cochlear Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Cochlear shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Cochlear. 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 Cochlear's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 5, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Cochlear. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 10 and Dividend Yield, which is lower than 54% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Cochlear's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Cochlear? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Cochlear? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Cochlear may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Cochlear Growth Momentum high
| GROWTH METRICS | December 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 55 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 74 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 29 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 91 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 81 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2023, Cochlear shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Cochlear. Sales Growth has a rank of 55 which means that currently, professionals expect the company to grow more than 55% of its competitors. Both Profit Growth, with a rank of 74, and Stock Returns, with a rank of 91, are also above average. But Capital Growth only has a rank of 29, which means that, currently, professionals expect the company to grow its invested capital less than 71% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Cochlear Debt Financing Safety above-average
| SAFETY METRICS | December 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 61 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 22 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 60 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 57 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 57 (better than 57% compared with alternatives), the company Cochlear has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Cochlear 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 Cochlear. Leverage is at a rank of 61, meaning the company has a below-average debt-to-equity ratio. It has less debt than 61% of its competitors. Liquidity is also good at a rank of 60, meaning the company generates more profit to service its debt than 60% 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 22, 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 78% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 57 (better than 57% compared with alternatives), Cochlear has a financing structure that is 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 Cochlear. 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
Combined financial peformance: Cochlear Above-Average Financial Performance
| COMBINED PERFORMANCE | December 21, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 10 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 60 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 54 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Cochlear (Health Care Equipment, Australia) shares have above-average financial characteristics compared with similar stocks. Shares of Cochlear are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 57, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Cochlear's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Cochlear exhibits low value (Obermatt Value Rank of 10), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 57) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.