October 5, 2023
Top 10 Stock Digi.Com 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: Digi.Com – Top 10 Stock in SDG 10: Reduced Inequality
Digi.Com is listed as a top 10 stock on October 05, 2023 in the market index SDG 10 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 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Digi.Com on October 05, 2023.
Snapshot: Obermatt Ranks
| Country | Malaysia |
| Industry | Wireless Telecommunication |
| Index | Good Governace Growth Markets, Independent Boards Growth Markets, SDG 10, SDG 13, SDG 4, SDG 5, SDG 9 |
| 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 Digi.Com Buy
| 360 METRICS | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 94 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| SENTIMENT | ||||||||
| SENTIMENT | 46 |
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| 360° VIEW | ||||||||
| 360° VIEW | 63 |
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ANALYSIS: With an Obermatt 360° View of 63 (better than 63% compared with alternatives), overall professional sentiment and financial characteristics for the stock Digi.Com are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Digi.Com. The consolidated Growth Rank has a good rank of 94, 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 94% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 66 which means that the company has a financing structure that is safer than 66% 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 22 which means that the share price of Digi.Com 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 78% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 46, which means that professional investors are more pessimistic about the stock than for 54% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Digi.Com is better positioned than 63% 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 94), and the company is safely financed (Safety Rank of 66). However, professional market sentiment is low(Sentiment Rank of 46). The negative market view on Digi.Com 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 Digi.Com compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred 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 if the value rank is above 60. As market sentiment is low, 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 Digi.Com only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 46 (better than 46% compared with alternatives), overall professional sentiment and engagement for the stock Digi.Com is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Digi.Com. 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. Worse, Analyst Opinions Change has a rank of 47, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 41, which means that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Digi.Com is Market Pulse, with a rank of 87, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 87% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 46 (less encouraging than 54% compared with investment alternatives), Digi.Com has a reputation among professional investors that is 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: Digi.Com Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 22 (worse than 78% compared with alternatives), Digi.Com shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Digi.Com. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 51% 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 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 Digi.Com's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 16 which means that the stock price compared with what market professionals expect for future profit levels is higher than 84% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 24 is also low. Compared with invested capital, the stock price is higher than for 76% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 22, is a sell recommendation based on Digi.Com's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Digi.Com? 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 Digi.Com only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Digi.Com Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 94 (better than 94% compared with alternatives) for 2023, Digi.Com 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 but one indicator above average for Digi.Com. Profit Growth has a rank of 84 which means that currently professionals expect the company to grow its profits more than 84% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 87, and Stock Returns has a rank of 87 which means that the stock returns have recently been above 87% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 18 (82% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 94, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Digi.Com Debt Financing Safety above-average
| SAFETY METRICS | October 5, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 55 |
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| REFINANCING | ||||||||
| REFINANCING | 44 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 70 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 66 |
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ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Digi.Com 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 Digi.Com 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 Digi.Com. Leverage is at a rank of 55, meaning the company has a below-average debt-to-equity ratio. It has less debt than 55% of its competitors. Liquidity is also good at a rank of 70, meaning the company generates more profit to service its debt than 70% 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 44, 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 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Digi.Com 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 Digi.Com. 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: Digi.Com Top Financial Performance
| COMBINED PERFORMANCE | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 94 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Digi.Com (Wireless Telecommunication, Malaysia) shares have much better financial characteristics than comparable stocks. Shares of Digi.Com are low in value (priced high) with a consolidated Value Rank of 22 (worse than 78% of alternatives). But they show above-average growth (Growth Rank of 94) and are safely financed (Safety Rank of 66, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Digi.Com's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Digi.Com exhibits low value (Obermatt Value Rank of 22), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 94). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 66) 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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