February 1, 2024
Top 10 Stock Smurfit Kappa 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: Smurfit Kappa – Top 10 Stock in FTSE 100 Index
Smurfit Kappa is listed as a top 10 stock on February 01, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 43 (43% performer), Obermatt assesses an overall hold recommendation for Smurfit Kappa on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | Ireland |
| Industry | Paper Packaging |
| Index | FTSE All Shares, FTSE 100, FTSE 350, ISEQ, Low Emissions, Human Rights |
| 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° View Smurfit Kappa Hold
| 360 METRICS | February 1, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 33 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 11 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 97 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 43 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 43 (better than 43% compared with alternatives), overall professional sentiment and financial characteristics for the stock Smurfit Kappa are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Smurfit Kappa. The consolidated Sentiment Rank has a good rank of 97, which means that professional investors are more optimistic about the stock than for 97% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 33, which means that the share price of Smurfit Kappa is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 47, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 47% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 11 which means that the company has a riskier financing structure than 89% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 43, Smurfit Kappa is worse than 57% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 97) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Smurfit Kappạ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Smurfit Kappa very positive
ANALYSIS: With an Obermatt Sentiment Rank of 97 (better than 97% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Smurfit Kappa is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Smurfit Kappa. Analyst Opinions are at a rank of 93 (better than 93% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 65, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Smurfit Kappa. The Professional Investors rank is 65, which means that currently, professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 84 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 84% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 97 (more positive than 97% compared with investment alternatives), Smurfit Kappa has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Smurfit Kappa stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Smurfit Kappa Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Smurfit Kappa shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Smurfit Kappa. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 69% 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 38 which means that the stock price compared with what market professionals expect for future profits is higher than 62% of comparable companies, indicating a low value concerning Smurfit Kappa's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 36 which means that the stock price compared with what market professionals expect for future profit levels is higher than 64% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 23 is also low. Compared with invested capital, the stock price is higher than for 77% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 33, is a hold recommendation based on Smurfit Kappa's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Smurfit Kappa? 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 Smurfit Kappa only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Smurfit Kappa Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% compared with alternatives), Smurfit Kappa shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Smurfit Kappa. While Profit Growth has a good rank of 70, as professionals currently expect the company to grow its profits more than 70% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 29, which means that currently professionals expect the company to grow less than 71% of its competitors, while Capital Growth has a rank of 32 and Stock Returns have been below market median, with a rank of 47 (53% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Smurfit Kappa Debt Financing Safety risky
| SAFETY METRICS | February 1, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 18 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 47 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 25 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% compared with alternatives), the company Smurfit Kappa has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Smurfit Kappa is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Smurfit Kappa. Liquidity is at 25, meaning that the company generates less profit to service its debt than 75% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 18, meaning the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. Finally, Refinancing is at a rank of 47 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 11 (worse than 89% compared with alternatives), Smurfit Kappa has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Smurfit Kappa Lowest Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 33 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 47 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 25 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 9 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), Smurfit Kappa (Paper Packaging, Ireland) shares have lower financial characteristics compared with similar stocks. Shares of Smurfit Kappa are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), show below-average growth (Growth Rank of 47), and are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on Smurfit Kappa's financial characteristics. As the company Smurfit Kappa's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 33), low growth (Obermatt Growth Rank of 47), and risky financing practices (Obermatt Safety Rank of 11), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to 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.