May 18, 2023
Top 10 Stock Digimarc 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: Digimarc – Top 10 Stock in SDG 14: Life Below Water
Digimarc is listed as a top 10 stock on May 18, 2023 in the market index SDG 14 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 38 (38% performer), Obermatt assesses an overall hold recommendation for Digimarc on May 18, 2023.
Snapshot: Obermatt Ranks
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 Digimarc Hold
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 23 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 93 |
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| SENTIMENT | ||||||||
| SENTIMENT | 32 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Digimarc 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 Digimarc. The consolidated Growth Rank has a good rank of 89, 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 89% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 93 which means that the company has a financing structure that is safer than 93 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 23 which means that the share price of Digimarc 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 77% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 32, which means that professional investors are more pessimistic about the stock than for 68% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 38, Digimarc is worse than 62% 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 89), and the company is safely financed (Safety Rank of 93). However, professional market sentiment is critical (Sentiment Rank of 32). The negative market view on Digimarc 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 Digimarc 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 Digimarc only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 32 (better than 32% compared with alternatives), overall professional sentiment and engagement for the stock Digimarc is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Digimarc. Analyst Opinions are at a rank of 7 (worse than 93% 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 81, 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 Digimarc. But the Professional Investors rank is low at 49, which means that professional investors hold less stock in this company than in 51% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 40, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 60% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 32 (less encouraging than 68% compared with investment alternatives), Digimarc has a reputation among professional investors that is 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: Digimarc Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 23 (worse than 77% compared with alternatives), Digimarc 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 Digimarc. Price-to-Sales is 1 which means that the stock price compared with what market professionals expect for future profits is higher than 99% of comparable companies, indicating a low value concerning Digimarc's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 30, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Digimarc. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 47 and Dividend Yield, which is lower than 99% 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 23, is a SELL recommendation based on Digimarc's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Digimarc? 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 Digimarc? 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. Digimarc 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: Digimarc Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2022, Digimarc 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 Digimarc. Sales Growth has a rank of 90 which means that currently, professionals expect the company to grow more than 90% of its competitors. Capital Growth is also above 8% of competitors with a rank of 97, and Stock Returns with the rank of 95 is also an outperformance. Only Profit Growth is low with a rank of 8 which means that currently, professionals expect the company to grow its profits less than 92% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a BUY recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communications about extra growth efforts costing time and money. If that is the case, Digimarc is a good growth stock. ...read more
Safety Strategy: Digimarc Debt Financing Safety very solid
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 100 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 93 |
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ANALYSIS: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives) for 2022, the company Digimarc has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Digimarc 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 Digimarc and the other two below average. Leverage is at a rank of 100 meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 47, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 53% of its competitors. Liquidity is at a rank of 41, meaning that the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 93 (better than 93% compared with alternatives), Digimarc has a financing structure that is significantly safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Digimarc are on the safer side. ...read more
Combined financial peformance: Digimarc Above-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 23 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Digimarc (Application Software, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Digimarc are low in value (priced high) with a consolidated Obermatt Value Rank of 23 (worse than 77% of alternatives). But they show above-average growth (Growth Rank of 89) and are safely financed (Safety Rank of 93, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 72, is a buy recommendation based on Digimarc's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Digimarc exhibits low value (Obermatt Value Rank of 23), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 89). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 93) 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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