February 1, 2024
Top 10 Stock DS Smith 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: DS Smith – Top 10 Stock in FTSE 100 Index
DS Smith is listed as a top 10 stock on February 01, 2024 in the market index FTSE 100 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. Based on the Obermatt 360° View of 47 (47% performer), Obermatt assesses an overall hold recommendation for DS Smith on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Paper Packaging |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Dividends Europe, Human Rights, Renewables Users |
| 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 DS Smith Hold
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| SENTIMENT | ||||||||
| SENTIMENT | 60 |
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| 360° VIEW | ||||||||
| 360° VIEW | 47 |
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ANALYSIS: With an Obermatt 360° View of 47 (better than 47% compared with alternatives), overall professional sentiment and financial characteristics for the stock DS Smith are below the industry average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for DS Smith. The consolidated Value Rank has an attractive rank of 77, which means that the share price of DS Smith 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 77% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 55, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 60. But the company’s financing is risky with a Safety rank of 14. This means 86% of comparable companies have a safer financing structure than DS Smith. ...read more
RECOMMENDATION: With a consolidated 360° View of 47, DS Smith is worse than 53% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 77), above-average growth (Growth Rank of 55), and positive market sentiment in the professional investor community (Sentiment Rank of 60), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 14), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of DS Smith is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for DS Smith positive
ANALYSIS: With an Obermatt Sentiment Rank of 60 (better than 60% compared with alternatives), overall professional sentiment and engagement for the stock DS Smith is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for DS Smith. Analyst Opinions are at a rank of 62 (better than 62% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 62, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 62% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 42, which means that currently, professional investors hold less stock in this company than in 58% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 60 (more positive than 60% compared with investment alternatives), DS Smith has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in DS Smith may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in DS Smith. ...read more
Value Strategy: DS Smith Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2024, DS Smith shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for DS Smith. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 74 which means that the stock price compared with what market professionals expect for future profits is lower than for 74% of comparable companies, indicating a good value concerning DS Smith's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 52, and for Dividend Yield with a Dividend Yield Rank of 96. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 52% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 48). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 77, is a buy recommendation based on DS Smith's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that DS Smith has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing DS Smith shares. ...read more
Growth Strategy: DS Smith Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), DS Smith shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for DS Smith. Sales Growth has a rank of 52, which means that, currently, professionals expect the company to grow more than 52% of its competitors. Profit Growth with a rank of 60 is also above average. But Capital Growth has only a rank of 41, and Stock Returns with 49 are also below-average. Stock returns for DS Smith have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for DS Smith. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: DS Smith Debt Financing Safety risky
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 45 |
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| REFINANCING | ||||||||
| REFINANCING | 4 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 43 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 14 |
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ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company DS Smith 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 DS Smith 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 DS Smith. Liquidity is at 43, meaning that the company generates less profit to service its debt than 57% 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 45, meaning the company has an above-average debt-to-equity ratio. It has more debt than 55% of its competitors. Finally, Refinancing is at a rank of 4 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), DS Smith 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: DS Smith Below-Average Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), DS Smith (Paper Packaging, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of DS Smith are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives), show above-average growth (Growth Rank of 55) but are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on DS Smith's financial characteristics. As the company DS Smith's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 77) and above-average growth (Obermatt Growth Rank of 55), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 14) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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