June 1, 2023
Top 10 Stock Daiichi Sankyo 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: Daiichi Sankyo – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Daiichi Sankyo is listed as a top 10 stock on June 01, 2023 in the market index TOPIX 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 33 (33% performer), Obermatt assesses an overall hold recommendation for Daiichi Sankyo on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Pharmaceuticals |
| Index | TOPIX 100, Nikkei 225 |
| Size class | X-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 Daiichi Sankyo Hold
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| SENTIMENT | ||||||||
| SENTIMENT | 15 |
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| 360° VIEW | ||||||||
| 360° VIEW | 33 |
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ANALYSIS: With an Obermatt 360° View of 33 (better than 33% compared with alternatives), overall professional sentiment and engagement for the stock Daiichi Sankyo 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 Daiichi Sankyo. The consolidated Growth Rank has a good rank of 95, 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 95% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 50 which means that the company has a financing structure that is safer than 50 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 15 which means that the share price of Daiichi Sankyo 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 85% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 15, which means that professional investors are more pessimistic about the stock than for 85% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 33, Daiichi Sankyo is worse than 67% 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 95), and the company is safely financed (Safety Rank of 50). However, professional market sentiment is critical (Sentiment Rank of 15). The negative market view on Daiichi Sankyo 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 Daiichi Sankyo compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one 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 (even though it is lower than 50). 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. ...read more
Sentiment Strategy: Professional Market Sentiment for Daiichi Sankyo negative
ANALYSIS: With an Obermatt Sentiment Rank of 15 (better than 15% compared with alternatives), overall professional sentiment and engagement for the stock Daiichi Sankyo is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Daiichi Sankyo. Analyst Opinions are at a rank of 65 (better than 65% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 24, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Daiichi Sankyo. The Professional Investors rank is also low at 14, meaning that professional investors hold less stock in this company than in 86% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 31, which means that the current professional news and professional social networks are critical of this company (more negative news than for 69% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 15 (less encouraging than 85% compared with investment alternatives), Daiichi Sankyo has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Daiichi Sankyo Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Daiichi Sankyo 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 Daiichi Sankyo. Price-to-Sales is 18 which means that the stock price compared with what market professionals expect for future profits is higher than 82% of comparable companies, indicating a low value concerning Daiichi Sankyo's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 17, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Daiichi Sankyo. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 13 and Dividend Yield, which is lower than 73% 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 15, is a SELL recommendation based on Daiichi Sankyo's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Daiichi Sankyo? 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 Daiichi Sankyo? It's risky, and even if it continues to grow because of popular demand, it will most likely return to what it's worth. 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 reasonable for the company to dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Daiichi Sankyo 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: Daiichi Sankyo Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2023, Daiichi Sankyo 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 four indicators above average for Daiichi Sankyo. Sales Growth has a value of 82, which means that, currently, professionals expect the company to grow more than 82% of its competitors. The same is valid for Profit Growth with a value of 55 and for Capital Growth with 98. In addition, Stock Returns had an above-average rank value of 85, which means they have been higher than 85% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a BUY recommendation for growth and momentum investors. Since all Growth Ranks are positive, Daiichi Sankyo exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future, or if the current performance is only a temporary recovery from a very low point in the company's history, such as a turn-around. In the case of a turn-around situation, the current performance is a positive indicator that the company is on the right track. ...read more
Safety Strategy: Daiichi Sankyo Debt Financing Safety above-average
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 70 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 56 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 50 |
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ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company Daiichi Sankyo 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 Daiichi Sankyo 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 Daiichi Sankyo. Leverage is at a rank of 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Liquidity is also good at a rank of 56, meaning the company generates more profit to service its debt than 56% 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 37, 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 63% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), Daiichi Sankyo 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 Daiichi Sankyo. 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: Daiichi Sankyo Above-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| COMBINED | ||||||||
| COMBINED | 52 |
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ANALYSIS: With an Obermatt Combined Rank of 52 (better than 52% compared with investment alternatives), Daiichi Sankyo (Pharmaceuticals, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Daiichi Sankyo are low in value (priced high) with a consolidated Obermatt Value Rank of 15 (worse than 85% of alternatives). But they show above-average growth (Growth Rank of 95) and are safely financed (Safety Rank of 50, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 52, is a buy recommendation based on Daiichi Sankyo's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Daiichi Sankyo exhibits low value (Obermatt Value Rank of 15), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 95). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 50) 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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