September 21, 2023
Top 10 Stock DSM Strong Buy Recommendation

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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 DSM Strong Buy

360 METRICS	September 21, 2023
VALUE
VALUE	73
GROWTH
GROWTH	45
SAFETY
SAFETY	87
SENTIMENT
SENTIMENT	63
360° VIEW
360° VIEW	95

ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock DSM are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for DSM. The consolidated Value Rank has an attractive rank of 73, which means that the share price of DSM is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 73% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 87. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 63. But the consolidated Growth Rank has a low rank of 45, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 55 of its competitors have better growth. ...read more

RECOMMENDATION: With a consolidated 360° View of 95, DSM is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 73), secure financing practices (Safety Rank of 87), and positive market sentiment in the professional investor community (Sentiment Rank of 63). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 45), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of DSM is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more

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Sentiment Strategy: Professional Market Sentiment for DSM positive

SENTIMENT METRICS	September 21, 2023
ANALYST OPINION
ANALYST OPINION	67
OPINIONS CHANGE
OPINIONS CHANGE	39
PRO HOLDINGS
PRO HOLDINGS	39
MARKET PULSE
MARKET PULSE	72
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	63

ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock DSM is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for DSM. Analyst Opinions are at a rank of 67 (better than 67% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 72, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 72% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 39, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in DSM. There are also only so many institutional investors holding company stock with a Professional Investors rank of 39, which means that, currently, professional investors hold less stock in this company than in 61% of alternative investment opportunities. Pros tend to invest in other companies. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), DSM has a reputation among professional investors that is above-average compared with that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more

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Value Strategy: DSM Stock Price Value better than average

VALUE METRICS	September 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	100
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	37
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	68
DIVIDEND YIELD
DIVIDEND YIELD	67
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	73

ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), DSM shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for DSM. Price-to-Sales (P/S) is 100 which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value for DSM's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 68. Finally, compared with other companies in the same industry, dividend yields of DSM are expected to be higher than for 67% of all competitors (a Dividend Yield rank of 67). The only low rank is for expected profits with a Price-to-Profit Rank of 37, indicating that the market expects the company's profit to be low despite a high dividend. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on DSM's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more

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Growth Strategy: DSM Growth Momentum low

GROWTH METRICS	September 21, 2023
REVENUE GROWTH
REVENUE GROWTH	23
PROFIT GROWTH
PROFIT GROWTH	37
CAPITAL GROWTH
CAPITAL GROWTH	63
STOCK RETURNS
STOCK RETURNS	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	45

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), DSM 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 indicators below average for DSM. Only Capital Growth has a good rank of 63, which means that currently professionals expect the company to grow its invested capital more than 37% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 23 which means that currently professionals expect the company to grow less than 77% of its competitors. Profit Growth with a rank of 37 and Stock Returns with a rank of 47 are also low (below 53% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for DSM is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more

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Safety Strategy: DSM Debt Financing Safety very solid

SAFETY METRICS	September 21, 2023
LEVERAGE
LEVERAGE	76
REFINANCING
REFINANCING	100
LIQUIDITY
LIQUIDITY	30
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	87

ANALYSIS: With an Obermatt Safety Rank of 87 (better than 87% compared with alternatives) for 2023, the company DSM has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of DSM 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 where two out of three are above average for DSM.Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors.Refinancing is at a rank of 100, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 100% of its competitors. Liquidity is at 30, meaning that the company generates less profit to service its debt than 70% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 87 (better than 87% compared with alternatives), DSM has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more

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Combined financial peformance: DSM Top Financial Performance

COMBINED PERFORMANCE	September 21, 2023
VALUE
VALUE	73
GROWTH
GROWTH	45
SAFETY
SAFETY	30
COMBINED
COMBINED	93

ANALYSIS: With an Obermatt Combined Rank of 93 (better than 93% compared with investment alternatives), DSM (Specialty Chemicals, Netherlands) shares have much better financial characteristics than comparable stocks. Shares of DSM are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), are safely financed (Safety Rank of 87, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more

RECOMMENDATION: A Combined Rank of 93, is a strong buy recommendation based on DSM's financial characteristics. As the company DSM's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 87), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 73% 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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