October 26, 2023
Top 10 Stock Cognex 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: Cognex – Top 10 Stock in Nasdaq Composite Index
Cognex is listed as a top 10 stock on October 26, 2023 in the market index NASDAQ because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 32 (32% performer), Obermatt assesses an overall hold recommendation for Cognex on October 26, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Electronic Equipment |
| Index | Dividends USA, Moonshot Tech, Robotics, NASDAQ, S&P MIDCAP |
| 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° View Cognex Hold
| 360 METRICS | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 34 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cognex are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Cognex. The only rank that is above average is the consolidated Safety Rank at 100, which means that the company has a financing structure that is safer than those of 100% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 32, which means that the share price of Cognex is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 31, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 34, which means that professional investors are more pessimistic about the stock than for 66% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 32, Cognex is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 34. The negative market view on Cognex may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. 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 Cognex only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 34 (better than 34% compared with alternatives), overall professional sentiment and engagement for the stock Cognex is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Cognex. Analyst Opinions are at a rank of 11 (worse than 89% 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 changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Cognex. Market Pulse is also positive with a rank of 95, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 95% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 20, which means that professional investors hold less stock in this company than in 80% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 34 (less encouraging than 66% compared with investment alternatives), Cognex has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Cognex Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Cognex 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 Cognex. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 88% 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 Cognex's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 15 which means that the stock price compared with what market professionals expect for future profit levels is higher than 85% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 25 is also low. Compared with invested capital, the stock price is higher than for 75% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on Cognex's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Cognex? 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 Cognex only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Cognex Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Cognex 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 three out of four indicators below-average for Cognex. While Sales Growth ranks at 75, professionals currently expect the company to grow more than 75% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 20, which means that, currently, professionals expect the company to grow its profits less than 80% of its competitors, and Capital Growth has a low rank of 48. Historic stock returns were also below average with a current Stock Returns rank of 31 which means that the stock returns have recently been below 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Cognex Debt Financing Safety very solid
| SAFETY METRICS | October 26, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 35 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2022, the company Cognex has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cognex 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 Cognex. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 92, meaning the company generates more profit to service its debt than 92% 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 35, 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 65% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Cognex 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 Cognex. 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: Cognex Top Financial Performance
| COMBINED PERFORMANCE | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 82 |
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ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Cognex (Electronic Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Cognex are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Cognex's financial characteristics. As the company Cognex's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 32) and low growth (Obermatt Growth Rank of 31), 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 100) 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 lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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