October 19, 2023
Top 10 Stock Nel ASA 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: Nel ASA – Top 10 Stock in Electromobility & Hydrogen
Nel ASA is listed as a top 10 stock on October 19, 2023 in the market index Electromobility because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for Nel ASA on October 19, 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° View Nel ASA Buy
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and financial characteristics for the stock Nel ASA are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Nel ASA. The consolidated Growth Rank has a good rank of 91, 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 91% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 64 which means that the company has a financing structure that is safer than 64% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 30 which means that the share price of Nel ASA is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 70% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 8, which means that professional investors are more pessimistic about the stock than for 92% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 54, Nel ASA is better positioned than 54% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 91), and the company is safely financed (Safety Rank of 64). However, professional market sentiment is low(Sentiment Rank of 8). The negative market view on Nel ASA may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Nel ASA compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Nel ASA negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock Nel ASA is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Nel ASA. 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 23, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 6, which means that professional investors hold less stock in this company than in 94% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Nel ASA is Market Pulse, with a rank of 69, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 69% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 8 (less encouraging than 92% compared with investment alternatives), Nel ASA has a reputation among professional investors that is far 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
Value Strategy: Nel ASA Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), Nel ASA shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Nel ASA. 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 58, which means that the stock price is lower compared with invested capital than for 58% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 20 which means the stock price compared with what market professionals expect for future profits is higher than 80% of comparable companies, indicating a low value concerning Nel ASA'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 58 and for the dividend yields rank which is lower than for 99% 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 30, is a hold recommendation based on Nel ASA's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Nel ASA, 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: Nel ASA Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 91 (better than 91% compared with alternatives) for 2023, Nel ASA 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 Nel ASA. Sales Growth has a value of 81 which means that currently professionals expect the company to grow more than 81% of its competitors. Profit Growth with a value of 74 and Capital Growth with a rank of 91 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 28, which means that stock returns have recently been below 72% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 91, is a buy recommendation for growth and momentum investors. Nel ASA has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Nel ASA, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Nel ASA Debt Financing Safety above-average
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 86 |
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| REFINANCING | ||||||||
| REFINANCING | 79 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
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ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Nel ASA 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 Nel ASA 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 where two out of three are above average for Nel ASA.Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors.Refinancing is at a rank of 79, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. Liquidity is at 6, meaning that the company generates less profit to service its debt than 94% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Nel ASA has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Nel ASA Top Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 30 |
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| GROWTH | ||||||||
| GROWTH | 91 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 80 |
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ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Nel ASA (Heavy Electrical Equipment, Norway) shares have much better financial characteristics than comparable stocks. Shares of Nel ASA are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives). But they show above-average growth (Growth Rank of 91) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 80, is a strong buy recommendation based on Nel ASA's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Nel ASA exhibits low value (Obermatt Value Rank of 30), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 91). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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