October 19, 2023
Top 10 Stock Dentsu Sell 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: Dentsu – Top 10 Stock in SDG 1: No Poverty
Dentsu is listed as a top 10 stock on October 19, 2023 in the market index SDG 1 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 4 (4% performer), Obermatt issues an overall sell recommendation for Dentsu on October 19, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Advertising |
| Index | Multimedia, Renewables Users, SDG 1, SDG 10, SDG 12, SDG 5, SDG 9, 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 Dentsu Sell
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| SENTIMENT | ||||||||
| SENTIMENT | 13 |
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| 360° VIEW | ||||||||
| 360° VIEW | 4 |
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ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and financial characteristics for the stock Dentsu are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Dentsu. Only the consolidated Value Rank has an attractive rank of 79, which means that the share price of Dentsu is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 79% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 31, which means 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. The consolidated Safety Rank has a riskier rank of 10, meaning the company has a riskier financing structure than 90% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 87% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 13. ...read more
RECOMMENDATION: With a consolidated 360° View of 4, Dentsu is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that Dentsu shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 79. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 31), a riskier financing structure than the competition (Safety Rank of 10), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 13) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Dentsu is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Dentsu. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Dentsu negative
ANALYSIS: With an Obermatt Sentiment Rank of 13 (better than 13% compared with alternatives), overall professional sentiment and engagement for the stock Dentsu is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Dentsu. Analyst Opinions are at a rank of 17 (worse than 83% 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 have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Dentsu. But the Professional Investors rank is low at 35, which means that professional investors hold less stock in this company than in 65% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 30, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 70% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 13 (less encouraging than 87% compared with investment alternatives), Dentsu has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Dentsu Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 79 (better than 79% compared with alternatives) for 2023, Dentsu shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Dentsu. Price-to-Sales is 70 which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value for Dentsu's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 71% 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 77. Compared with other companies in the same industry, dividend yields of Dentsu are expected to be higher than for 80% of all competitors (a Dividend Yield rank of 80). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 79, is a buy recommendation based on Dentsu'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 Dentsu based on its detailed value metrics.
Growth Strategy: Dentsu Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Dentsu 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 metrics below average for Dentsu. While Profit Growth has a good rank of 67, as professionals currently expect the company to grow its profits more than 67% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 22, which means that currently professionals expect the company to grow less than 78% of its competitors, while Capital Growth has a rank of 21 and Stock Returns have been below market median, with a rank of 47 (53% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Dentsu Debt Financing Safety risky
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 16 |
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| REFINANCING | ||||||||
| REFINANCING | 10 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 34 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 10 |
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ANALYSIS: With an Obermatt Safety Rank of 10 (better than 10% compared with alternatives), the company Dentsu has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Dentsu is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Dentsu. Liquidity is at 34, meaning that the company generates less profit to service its debt than 66% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Finally, Refinancing is at a rank of 10 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 10 (worse than 90% compared with alternatives), Dentsu has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Dentsu Lowest Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 79 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 34 |
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| COMBINED | ||||||||
| COMBINED | 18 |
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ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), Dentsu (Advertising, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Dentsu are a good value (attractively priced) with a consolidated Value Rank of 79 (better than 79% of alternatives) but show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 10), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 18, is a sell recommendation based on Dentsu's financial characteristics. As the company Dentsu's key financial metrics exhibit good value (Obermatt Value Rank of 79) but low growth (Obermatt Growth Rank of 31) and risky financing practices (Obermatt Safety Rank of 10), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 79% of comparable companies, may indicate 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. ...read more
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