May 18, 2023
Top 10 Stock Orkla 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: Orkla – Top 10 Stock in OBX Index
Orkla is listed as a top 10 stock on May 18, 2023 in the market index OBX Index because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 48 (48% performer), Obermatt assesses an overall hold recommendation for Orkla on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | Norway |
| Industry | Packaged Foods & Meats |
| Index | Dividends Europe, Energy Efficient, Renewables Users, OBX Index |
| 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 Orkla Hold
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 52 |
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| GROWTH | ||||||||
| GROWTH | 18 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 52 |
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| 360° VIEW | ||||||||
| 360° VIEW | 48 |
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ANALYSIS: With an Obermatt 360° View of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Orkla are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Orkla. The consolidated Value Rank has an attractive rank of 52, which means that the share price of Orkla is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 52% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 73. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 52. But the consolidated Growth Rank has a low rank of 18, which means that the company is below average in terms of growth, and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 82 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 48, Orkla is worse than 52% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 52), secure financing practices (Safety Rank of 73), and positive market sentiment in the professional investor community (Sentiment Rank of 52). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company growth expectations are below the industry average (Growth Rank of 18), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good value ranking can sometimes indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Orkla is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Orkla positive
ANALYSIS: With an Obermatt Sentiment Rank of 52 (better than 52% compared with alternatives), overall professional sentiment and engagement for the stock Orkla is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Orkla. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 68, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Orkla. More encouragingly, the Professional Investors rank is 88, which means that professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 43, 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 57% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 52 (more positive than 52% compared with investment alternatives), Orkla has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Orkla. While analysts and the news channels are negative, there is a change in what stock research analysts think. Above-average institutional investors in this company support them. While the sentiment signals remain mixed with analysts and news channels pessimistic, some analysts are optimistic, which is an encouraging sign for investing in this stock. ...read more
Value Strategy: Orkla Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 52 (better than 52% compared with alternatives), Orkla shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Orkla. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 79% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Orkla's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book Capital (also referred to as market-to-book ratio) with an Price-to-Book Rank of 46 is also low. Compared with invested capital, the stock price is higher than for 54% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 52, is a BUY recommendation based on Orkla's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Orkla? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Orkla only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Orkla Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 18 (better than 18% compared with alternatives), Orkla 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 Orkla. Sales Growth has a below market rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors. The same is valid for Capital Growth, with a rank of 30, and Profit Growth, with a rank of 37. Currently, professionals expect the company to grow its profits less than 63% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 71, which means that the stock returns have recently been above 71% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 18, 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 Orkla, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with an above-market return. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive shareholder 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
Safety Strategy: Orkla Debt Financing Safety above-average
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 71 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 83 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company Orkla 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 Orkla 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 Orkla. Leverage is at a rank of 71, meaning the company has a below-average debt-to-equity ratio. It has less debt than 71% of its competitors. Liquidity is also good at a rank of 83, meaning the company generates more profit to service its debt than 83% 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 34, 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 66% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), Orkla has a financing structure that is 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 Orkla. 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: Orkla Below-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 52 |
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| GROWTH | ||||||||
| GROWTH | 18 |
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| SAFETY | ||||||||
| SAFETY | 83 |
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| COMBINED | ||||||||
| COMBINED | 48 |
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ANALYSIS: With an Obermatt Combined Rank of 48 (worse than 52% compared with investment alternatives), Orkla (Packaged Foods & Meats, Norway) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Orkla are a good value (attractively priced) with a consolidated Obermatt Value Rank of 52 (better than 52% of alternatives), are safely financed (Safety Rank of 73, which means low debt burdens), but show below-average growth (Growth Rank of 18). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 48, is a hold recommendation based on Orkla's financial characteristics. As the company Orkla's key financial metrics exhibit good value (Obermatt Value Rank of 52) but low growth (Obermatt Growth Rank of 18) while being safely financed (Obermatt Safety Rank of 73), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 52% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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