February 8, 2024
Top 10 Stock Holmen Sell 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: Holmen – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Holmen is listed as a top 10 stock on February 08, 2024 in the market index SDG 17 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 6 (6% performer), Obermatt issues an overall sell recommendation for Holmen on February 08, 2024.
Snapshot: Obermatt Ranks
| Country | Sweden |
| Industry | Paper Products |
| Index | Human Rights, Renewables Users, SDG 13, SDG 14, SDG 15, SDG 17, Timber Industry |
| 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 Holmen Sell
| 360 METRICS | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 86 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 4 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 6 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 6 (better than 6% compared with alternatives), overall professional sentiment and financial characteristics for the stock Holmen are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Holmen. The only rank that is above average is the consolidated Safety Rank at 86, which means that the company has a financing structure that is safer than those of 86% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 8, which means that the share price of Holmen is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 21, which implies that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. Finally, the consolidated Sentiment Rank is also low at a rank of 4, which means that professional investors are more pessimistic about the stock than for 96% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 6, Holmen is worse than 94% of all alternative stock investment opportunities based on the Obermatt Method. This means that Holmen shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 4. The negative market view on Holmen may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Holmen negative
ANALYSIS: With an Obermatt Sentiment Rank of 4 (better than 4% compared with alternatives), overall professional sentiment and engagement for the stock Holmen is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Holmen. Analyst Opinions are at a rank of 1 (worse than 99% 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 8 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 34, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 66% of competitors). No wonder, the Professional Investors rank is only 38, which means that professional investors hold less stock in this company than in 62% of alternative investment opportunities. Pros tend to stay away from Holmen, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 4 (less encouraging than 96% compared with investment alternatives), Holmen has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Holmen Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), Holmen shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Holmen. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 71, which means that the stock price is lower compared with invested capital than for 71% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 3 which means the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Holmen's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 71 and for the dividend yields rank which is lower than for 66% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on Holmen's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Holmen, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Holmen Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Holmen shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Holmen. Sales Growth has a rank of 39, which means that currently professionals expect the company to grow less than 61% of its competitors. The same is valid for Profit Growth, with a rank of 41, and Capital Growth with 34. In addition, Stock Returns have a below market rank of 49, which means that the stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Holmen Debt Financing Safety very solid
| SAFETY METRICS | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 97 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 17 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2024, the company Holmen has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Holmen 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, with two out of three indicators above average for Holmen. Leverage is at a rank of 97, meaning the company has a below-average debt-to-equity ratio. It has less debt than 97% of its competitors. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% 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 17, 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 83% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), Holmen has a financing structure that is significantly safer 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 Holmen. 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: Holmen Lowest Financial Performance
| COMBINED PERFORMANCE | February 8, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 95 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 14 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 14 (worse than 86% compared with investment alternatives), Holmen (Paper Products, Sweden) shares have lower financial characteristics compared with similar stocks. Shares of Holmen are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives) and show below-average growth (Growth Rank of 21) but are safely financed (Safety Rank of 86), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 14, is a sell recommendation based on Holmen's financial characteristics. As the company Holmen's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 8) and low growth (Obermatt Growth Rank of 21), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 86) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.