June 1, 2023
Top 10 Stock FMC 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: FMC – Top 10 Stock in SDG 15: Life on Land
FMC is listed as a top 10 stock on June 01, 2023 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for FMC on June 01, 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 FMC Hold
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 76 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| SENTIMENT | ||||||||
| SENTIMENT | 57 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and engagement for the stock FMC 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 FMC. The consolidated Growth Rank has a good rank of 76, 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 76% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 57, which means that professional investors are more optimistic about the stock than for 57% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 32, which means that the share price of FMC is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 68% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 32, which means that the company has a financing structure that is riskier than 68% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 34, FMC is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 76), and professional market sentiment is positive (Sentiment Rank of 57), but value and safety are below average. The Safety Rank is the least important of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take one minus the growth rank, that is the minimum level that the value rank should have. 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). Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for FMC positive
ANALYSIS: With an Obermatt Sentiment Rank of 57 (better than 57% compared with alternatives), overall professional sentiment and engagement for the stock FMC is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for FMC. Analyst Opinions are at a rank of 59 (better than 59% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 65, which means that currently, professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 73 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 73% of competitors). But Analyst Opinions Change has a below-average rank of 22, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in FMC. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 57 (more positive than 57% compared with investment alternatives), FMC has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: FMC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), FMC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for FMC. Price-to-Profit (also referred to as price-earnings, P/E) is 54 which means that the stock price compared with what market professionals expect for future profits is lower than for 54% of comparable companies, indicating a good value concerning FMC's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with an Price-to-Book Rank of 24, which means that the stock price is lower compared with invested capital than for 24% of comparable investments. On the other hand, Price-to-Sales is less favorable than 81% of alternatives (only 19% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 41% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a HOLD recommendation based on FMC's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. This needs to be investigated, and the company's optimism verified before deciding to buy the stock. ...read more
Growth Strategy: FMC Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 76 (better than 76% compared with alternatives) for 2023, FMC 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 four indicators above average for FMC. Sales Growth has a value of 65, which means that, currently, professionals expect the company to grow more than 65% of its competitors. The same is valid for Profit Growth with a value of 65 and for Capital Growth with 61. In addition, Stock Returns had an above-average rank value of 62, which means they have been higher than 62% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 76, is a BUY recommendation for growth and momentum investors. Since all Growth Ranks are positive, FMC exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future, or if the current performance is only a temporary recovery from a very low point in the company's history, such as a turn-around. In the case of a turn-around situation, the current performance is a positive indicator that the company is on the right track. ...read more
Safety Strategy: FMC Debt Financing Safety below-average
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 47 |
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| REFINANCING | ||||||||
| REFINANCING | 26 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 59 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
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ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company FMC has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of FMC 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 just one indicator above average for FMC. Liquidity is at 59, meaning the company generates more profit to service its debt than 59% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 26, 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 74% of its competitors. Leverage is also high at a rank of 47, which means that the company has an above-average debt-to-equity ratio. It has more debt than 53% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 32 (worse than 68% compared with alternatives), FMC has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usuallyl indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: FMC Below-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 32 |
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| GROWTH | ||||||||
| GROWTH | 76 |
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| SAFETY | ||||||||
| SAFETY | 59 |
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| COMBINED | ||||||||
| COMBINED | 32 |
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ANALYSIS: With an Obermatt Combined Rank of 32 (worse than 68% compared with investment alternatives), FMC (Fertilizers & Agricultural Chemicals, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of FMC are low in value (priced high) with a consolidated Obermatt Value Rank of 32 (worse than 68% of alternatives), and are riskily financed (Safety Rank of 32, which means above-average debt burdens) but show above-average growth (Growth Rank of 76). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 32, is a hold recommendation based on FMC's financial characteristics. As the company FMC shows low value with an Obermatt Value Rank of 32 (68% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 76% of comparable companies (Obermatt Growth Rank is 76). This is a typical case. Companies with above average growth tend to cost more than the sluggish variety. If this is a high-growth company, the low Obermatt Safety Rank of 32 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for FMC, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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