January 18, 2024
Top 10 Stock Mercedes Strong 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: Mercedes – Top 10 Stock in Low Waste Leaders
Mercedes is listed as a top 10 stock on January 18, 2024 in the market index Low Waste because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Mercedes on January 18, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Automobile Manufacturers |
| Index | CDAX, DAX 40, EURO STOXX 50, Dividends Europe, Diversity Europe, Human Rights, Low Waste, Recycling, SDG 11, SDG 12, SDG 13, SDG 8, SDG 9 |
| 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 Mercedes Strong Buy
| 360 METRICS | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Mercedes are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Mercedes. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Mercedes is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 63. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 61. But the consolidated Growth Rank has a low rank of 35, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 65 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 77, Mercedes is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 93), secure financing practices (Safety Rank of 63), and positive market sentiment in the professional investor community (Sentiment Rank of 61). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 35), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Mercedes is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Mercedes positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Mercedes is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Mercedes. Analyst Opinions are at a rank of 45 (worse than 55% 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 72, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Mercedes. Even better, the Professional Investors rank is 55, meaning that professional investors hold more stock in this company than in 55% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 52, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 52% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Mercedes has a reputation among professional investors that is above-average compared with 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: Mercedes Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2024, Mercedes shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Mercedes. Price-to-Sales is 58 which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value for Mercedes's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 87% 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 82. Compared with other companies in the same industry, dividend yields of Mercedes are expected to be higher than for 99% of all competitors (a Dividend Yield rank of 99). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on Mercedes'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 Mercedes based on its detailed value metrics.
Growth Strategy: Mercedes Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Mercedes 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 Mercedes. Only Capital Growth has a good rank of 96, which means that currently professionals expect the company to grow its invested capital more than 10% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 25 which means that currently professionals expect the company to grow less than 75% of its competitors. Profit Growth with a rank of 10 and Stock Returns with a rank of 43 are also low (below 57% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Mercedes is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Mercedes Debt Financing Safety above-average
| SAFETY METRICS | January 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 32 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 82 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
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ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Mercedes 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 Mercedes 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 Mercedes. Refinancing is at 65, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. Liquidity is also good at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 32, which means the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 63 (better than 63% compared with alternatives), Mercedes has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Mercedes could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Mercedes Top Financial Performance
| COMBINED PERFORMANCE | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Mercedes (Automobile Manufacturers, Germany) shares have much better financial characteristics than comparable stocks. Shares of Mercedes are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 63, which means low debt burdens), but show below-average growth (Growth Rank of 35). ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Mercedes's financial characteristics. As the company Mercedes's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 35) while being safely financed (Obermatt Safety Rank of 63), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 93% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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