February 1, 2024
Top 10 Stock DENKA 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: DENKA – Top 10 Stock in Nikkei 225 Index
DENKA is listed as a top 10 stock on February 01, 2024 in the market index Nikkei 225 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 negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 56 (high 56% performer), Obermatt assesses an overall buy recommendation for DENKA on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Commodity Chemicals |
| Index | Low Emissions, Energy Efficient, 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° View DENKA Buy
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| SENTIMENT | ||||||||
| SENTIMENT | 22 |
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| 360° VIEW | ||||||||
| 360° VIEW | 56 |
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ANALYSIS: With an Obermatt 360° View of 56 (better than 56% compared with alternatives), overall professional sentiment and financial characteristics for the stock DENKA are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for DENKA. The consolidated Value Rank has an attractive rank of 89, which means that the share price of DENKA 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 89% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 55. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 22. Professional investors are more confident in 78% other stocks. The consolidated Growth Rank also has a low rank of 31, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 69 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 56, DENKA is better positioned than 56% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 89), and the financing structure is on the safer side (Safety Rank of 55). However, sentiment in the professional investor community is below-average (Sentiment Rank of 22), as is the growth momentum for the company (Growth Rank of 31). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still 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 DENKA negative
ANALYSIS: With an Obermatt Sentiment Rank of 22 (better than 22% compared with alternatives), overall professional sentiment and engagement for the stock DENKA 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 DENKA. Analyst Opinions are at a rank of 27 (worse than 73% 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 27, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 27, which means that professional investors hold less stock in this company than in 73% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for DENKA is Market Pulse, with a rank of 55, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 55% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 22 (less encouraging than 78% compared with investment alternatives), DENKA 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: DENKA Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 89 (better than 89% compared with alternatives) for 2024, DENKA shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for DENKA. Price-to-Sales is 63 which means that the stock price compared with what market professionals expect for future sales is lower than for 63% of comparable companies, indicating a good value for DENKA's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 75% 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 76. Compared with other companies in the same industry, dividend yields of DENKA 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 89, is a buy recommendation based on DENKA'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 DENKA based on its detailed value metrics.
Growth Strategy: DENKA Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), DENKA 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 half of the indicators below and half above average for DENKA. Profit Growth has a rank of 62, which means that currently professionals expect the company to grow its profits more than 62% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 55 (above 55% of alternative investments). But Sales Growth has a below the median rank of 10, which means that, currently, professionals expect the company to grow less than 90% of its competitors, and Capital Growth also has a lower rank of 25. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for DENKA. ...read more
Safety Strategy: DENKA Debt Financing Safety above-average
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 45 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 55 |
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ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company DENKA 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 DENKA 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 just one indicator above average for DENKA. Liquidity is at 71, meaning the company generates more profit to service its debt than 71% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 45, 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 55% of its competitors. Leverage is also high at a rank of 36, which means that the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), DENKA has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: DENKA Above-Average Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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| COMBINED | ||||||||
| COMBINED | 73 |
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ANALYSIS: With an Obermatt Combined Rank of 73 (better than 73% compared with investment alternatives), DENKA (Commodity Chemicals, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of DENKA are a good value (attractively priced) with a consolidated Value Rank of 89 (better than 89% of alternatives), are safely financed (Safety Rank of 55, which means low debt burdens), but show below-average growth (Growth Rank of 31). ...read more
RECOMMENDATION: A Combined Rank of 73, is a buy recommendation based on DENKA's financial characteristics. As the company DENKA's key financial metrics exhibit good value (Obermatt Value Rank of 89) but low growth (Obermatt Growth Rank of 31) while being safely financed (Obermatt Safety Rank of 55), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 89% 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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