May 18, 2023
Top 10 Stock Hess 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: Hess – Top 10 Stock in Oil & Gas Mining and Production
Hess is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas 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 43 (43% performer), Obermatt assesses an overall hold recommendation for Hess on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Oil & Gas Production |
| Index | Low Emissions, Employee Focus US, Human Rights, Oil & Gas, S&P 500 |
| 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° Assessment Hess Hold
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| SENTIMENT | ||||||||
| SENTIMENT | 67 |
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| 360° VIEW | ||||||||
| 360° VIEW | 43 |
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ANALYSIS: With an Obermatt 360° View of 43 (better than 43% compared with alternatives), overall professional sentiment and engagement for the stock Hess 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 Hess. The consolidated Growth Rank has a good rank of 100, 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 100% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 67, which means that professional investors are more optimistic about the stock than for 67% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 3, which means that the share price of Hess 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 97% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 33, which means that the company has a financing structure that is riskier than 67% 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 43, Hess is worse than 57% 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 100), and professional market sentiment is positive (Sentiment Rank of 67), 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 Hess positive
ANALYSIS: With an Obermatt Sentiment Rank of 67 (better than 67% compared with alternatives), overall professional sentiment and engagement for the stock Hess is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Hess. Analyst Opinions are at a rank of 45 (worse than 55% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 29, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 59, which means that professional investors hold more stock in this company than in 59% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 100, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 100% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Hess and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 67 (more positive than 67% compared with investment alternatives), Hess has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Hess Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Hess 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 Hess. Price-to-Sales is 4 which means that the stock price compared with what market professionals expect for future profits is higher than 96% of comparable companies, indicating a low value concerning Hess's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 4, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Hess. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 5 and Dividend Yield, which is lower than 69% 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 3, is a SELL recommendation based on Hess's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Hess? 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 Hess? 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. Hess 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: Hess Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2023, Hess 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 Hess. Sales Growth has a value of 82, which means that, currently, professionals expect the company to grow more than 82% of its competitors. The same is valid for Profit Growth with a value of 64 and for Capital Growth with 88. In addition, Stock Returns had an above-average rank value of 95, which means they have been higher than 95% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a BUY recommendation for growth and momentum investors. Since all Growth Ranks are positive, Hess 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: Hess Debt Financing Safety below-average
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 14 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 15 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
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ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company Hess 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 Hess 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 Hess and the other two below average. Refinancing is at 81, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. But Leverage is high with a rank of 14, meaning the company has an above-average debt-to-equity ratio. It has more debt than 86% of its competitors. Liquidity is also on the riskier side with a rank of 15, meaning the company generates less profit to service its debt than 85% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 33 (worse than 67% compared with alternatives), Hess has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Hess are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making a financial decision. ...read more
Combined financial peformance: Hess Below-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 15 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Hess (Oil & Gas Production, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Hess are low in value (priced high) with a consolidated Obermatt Value Rank of 3 (worse than 97% of alternatives), and are riskily financed (Safety Rank of 33, which means above-average debt burdens) but show above-average growth (Growth Rank of 100). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 43, is a hold recommendation based on Hess's financial characteristics. As the company Hess shows low value with an Obermatt Value Rank of 3 (97% 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 100% of comparable companies (Obermatt Growth Rank is 100). 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 33 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 Hess, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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