December 28, 2023
Top 10 Stock Hologic Hold 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 Hologic Hold

360 METRICS	December 28, 2023
VALUE
VALUE	40
GROWTH
GROWTH	19
SAFETY
SAFETY	72
SENTIMENT
SENTIMENT	49
360° VIEW
360° VIEW	31

ANALYSIS: With an Obermatt 360° View of 31 (better than 31% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hologic are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Hologic. The only rank that is above average is the consolidated Safety Rank at 72, which means that the company has a financing structure that is safer than those of 72% 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 40, which means that the share price of Hologic 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 19, 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 49, which means that professional investors are more pessimistic about the stock than for 51% 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 31, Hologic is worse than 69% of all alternative stock investment opportunities based on the Obermatt Method. 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 49. The negative market view on Hologic 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

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Sentiment Strategy: Professional Market Sentiment for Hologic only reserved

SENTIMENT METRICS	December 28, 2023
ANALYST OPINION
ANALYST OPINION	21
OPINIONS CHANGE
OPINIONS CHANGE	36
PRO HOLDINGS
PRO HOLDINGS	69
MARKET PULSE
MARKET PULSE	91
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	49

ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock Hologic is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Hologic. Analyst Opinions are at a rank of 21 (worse than 79% 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 36, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 69, which means that professional investors hold more stock in this company than in 69% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 91, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 91% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Hologic and the professional news channels are on the positive side. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), Hologic has a reputation among professional investors that is below 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

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Value Strategy: Hologic Stock Price Value below-average critical

VALUE METRICS	December 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	34
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	50
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	40

ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), Hologic 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 Hologic. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Hologic's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 50, which means that the stock price is lower as regards to invested capital than for 50% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 66% of alternatives (only 34% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% 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 40, is a hold recommendation based on Hologic'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 concerning expected revenues, 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 Group or 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 distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more

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Growth Strategy: Hologic Growth Momentum negative

GROWTH METRICS	December 28, 2023
REVENUE GROWTH
REVENUE GROWTH	29
PROFIT GROWTH
PROFIT GROWTH	41
CAPITAL GROWTH
CAPITAL GROWTH	18
STOCK RETURNS
STOCK RETURNS	53
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	19

ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Hologic 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 three out of four indicators below average for Hologic. Sales Growth has a below market rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors. The same is valid for Capital Growth, with a rank of 18, and Profit Growth, with a rank of 41. Currently, professionals expect the company to grow its profits less than 59% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 53, which means that the stock returns have recently been above 53% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Hologic, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more

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Safety Strategy: Hologic Debt Financing Safety above-average

SAFETY METRICS	December 28, 2023
LEVERAGE
LEVERAGE	32
REFINANCING
REFINANCING	51
LIQUIDITY
LIQUIDITY	76
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	72

ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company Hologic has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hologic 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 Hologic. Refinancing is at 51, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Liquidity is also good at 76, meaning the company generates more profit to service its debt than 76% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 32, which means the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), Hologic has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Hologic could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more

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Combined financial peformance: Hologic Lowest Financial Performance

COMBINED PERFORMANCE	December 28, 2023
VALUE
VALUE	40
GROWTH
GROWTH	19
SAFETY
SAFETY	76
COMBINED
COMBINED	23

ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Hologic (Health Care Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Hologic are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 72), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Hologic's financial characteristics. As the company Hologic's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 40) and low growth (Obermatt Growth Rank of 19), 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 72) 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

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