February 15, 2024
Top 10 Stock Freenet Strong 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: Freenet – Top 10 Stock in Deutscher Aktienindex Mid Cap MDAX
Freenet is listed as a top 10 stock on February 15, 2024 in the market index MDAX 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 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Freenet on February 15, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Wireless Telecommunication |
| Index | CDAX, Dividends Europe, Renewables Users, MDAX, TecDAX |
| 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 Freenet Strong Buy
| 360 METRICS | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 47 |
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| SENTIMENT | ||||||||
| SENTIMENT | 74 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Freenet are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Freenet. The consolidated Growth Rank has a good rank of 93, 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 93% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 74, which means that professional investors are more optimistic about the stock than for 74% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 40, which means that the share price of Freenet 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 60% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 47, which means that the company has a financing structure that is riskier than those of 53% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 78, Freenet is better positioned than 78% 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 93), and professional market sentiment is positive (Sentiment Rank of 74), but value and safety are below average. The Safety Rank is the least significant 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 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Freenet positive
ANALYSIS: With an Obermatt Sentiment Rank of 74 (better than 74% compared with alternatives), overall professional sentiment and engagement for the stock Freenet is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Freenet. Analyst Opinions are at a rank of 81 (better than 81% 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 51, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 51% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 47, which means that currently, professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 74 (more positive than 74% compared with investment alternatives), Freenet has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in Freenet 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 Freenet. ...read more
Value Strategy: Freenet Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), Freenet shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Freenet. Price-to-Sales (P/S) is 51, which means that the stock price compared with what market professionals expect for future sales is lower than for 51% of comparable companies, indicating a good value concerning Freenet's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 74, which means that dividends are expected to be higher than for 74% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 69% of alternatives (only 31% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 84% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on Freenet's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: Freenet Growth Momentum high
| GROWTH METRICS | February 15, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 48 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 94 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 67 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 83 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 93 |
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ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2024, Freenet 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 Freenet. Profit Growth has a rank of 94 which means that currently professionals expect the company to grow its profits more than 94% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 67, and Stock Returns has a rank of 83 which means that the stock returns have recently been above 83% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 48 (52% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, 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: Freenet Debt Financing Safety below-average
| SAFETY METRICS | February 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 69 |
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| REFINANCING | ||||||||
| REFINANCING | 16 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 47 |
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ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company Freenet 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 Freenet 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 two out of three indicators above average for Freenet. Leverage is at a rank of 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors. Liquidity is also good at a rank of 52, meaning the company generates more profit to service its debt than 52% 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 16, 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 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 47 (worse than 53% compared with alternatives), Freenet has a financing structure that is riskier 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 Freenet. 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: Freenet Top Financial Performance
| COMBINED PERFORMANCE | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 52 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Freenet (Wireless Telecommunication, Germany) shares have much better financial characteristics than comparable stocks. Shares of Freenet are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives), and are riskily financed (Safety Rank of 47, which means above-average debt burdens) but show above-average growth (Growth Rank of 93). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Freenet's financial characteristics. As the company Freenet shows low value with an Obermatt Value Rank of 40 (60% 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 93% of comparable companies (Obermatt Growth Rank is 93). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 47 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 Freenet, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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