January 25, 2024
Top 10 Stock SimCorp 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: SimCorp – Top 10 Stock in OMX Copenhagen 20
SimCorp is listed as a top 10 stock on January 25, 2024 in the market index OMX C20 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for SimCorp on January 25, 2024.
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 SimCorp Buy
| 360 METRICS | January 25, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 11 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 53 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 86 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 51 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 65 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock SimCorp are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for SimCorp. The consolidated Growth Rank has a good rank of 53, 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 53% of competitors in the same industry. The consolidated Safety Rank at 86 means that the company has a financing structure that is safer than 86% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 51, which means that professional investors are more optimistic about the stock than for 51% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 11, meaning that the share price of SimCorp is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 89% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 65, SimCorp is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 53), a safe financing structure (Safety Rank of 86), and positive professional market sentiment (Sentiment Rank of 51), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of SimCorp compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (53% better than peers). The value rank could be the reverse reflection of that (47%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for SimCorp positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock SimCorp is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for SimCorp. 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. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in SimCorp. Even better, the Professional Investors rank is 70, meaning that professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), SimCorp has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: SimCorp Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), SimCorp shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for SimCorp. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 59% 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 7 which means that the stock price compared with what market professionals expect for future profits is higher than 93% of comparable companies, indicating a low value concerning SimCorp's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 12 which means that the stock price compared with what market professionals expect for future profit levels is higher than 88% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7 is also low. Compared with invested capital, the stock price is higher than for 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on SimCorp's stock price compared with the company's operational size and dividend yields. Should dividend investors pick SimCorp? 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 SimCorp only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: SimCorp Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 53 (better than 53% compared with alternatives), SimCorp shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for SimCorp. Sales Growth has a below market rank of 35, which means that, currently, professionals expect the company to grow less than 65% of its competitors. The same is valid for Capital Growth, with a rank of 35, and Profit Growth, with a rank of 39. Currently, professionals expect the company to grow its profits less than 61% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 85, which means that the stock returns have recently been above 85% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 53, is a buy recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for SimCorp, 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
Safety Strategy: SimCorp Debt Financing Safety very solid
| SAFETY METRICS | January 25, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 78 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 54 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 86 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 86 (better than 86% compared with alternatives) for 2023, the company SimCorp has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of SimCorp 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 all three are above average for SimCorp. Leverage is at 78, meaning the company has a below-average debt-to-equity ratio. It has less debt than 78% of its competitors. Refinancing is at a rank of 54, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Finally, Liquidity is also good at a rank of 92, which means that the company generates more profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 86 (better than 86% compared with alternatives), SimCorp has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: SimCorp Above-Average Financial Performance
| COMBINED PERFORMANCE | January 25, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 11 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 53 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 92 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 54 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), SimCorp (Application Software, Denmark) shares have above-average financial characteristics compared with similar stocks. Shares of SimCorp are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives). But they show above-average growth (Growth Rank of 53) and are safely financed (Safety Rank of 86, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on SimCorp's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company SimCorp exhibits low value (Obermatt Value Rank of 11), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 53). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 86) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.