February 1, 2024
Top 10 Stock Smith & Nephew 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: Smith & Nephew – Top 10 Stock in FTSE 100 Index
Smith & Nephew 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. 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 74 (high 74% performer), Obermatt assesses an overall buy recommendation for Smith & Nephew on February 01, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Health Care Equipment |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Robotics |
| 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 Smith & Nephew Buy
| 360 METRICS | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| SENTIMENT | ||||||||
| SENTIMENT | 51 |
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| 360° VIEW | ||||||||
| 360° VIEW | 74 |
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ANALYSIS: With an Obermatt 360° View of 74 (better than 74% compared with alternatives), overall professional sentiment and financial characteristics for the stock Smith & Nephew are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Smith & Nephew. The consolidated Value Rank has an attractive rank of 87, which means that the share price of Smith & Nephew 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 87% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 56. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 51. But the consolidated Growth Rank has a low rank of 45, 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. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 74, Smith & Nephew is better positioned than 74% 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 87), secure financing practices (Safety Rank of 56), and positive market sentiment in the professional investor community (Sentiment Rank of 51). 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’s growth expectations are below the industry average (Growth Rank of 45), 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 Rank could 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 Smith & Nephew 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 Smith & Nephew positive
ANALYSIS: With an Obermatt Sentiment Rank of 51 (better than 51% compared with alternatives), overall professional sentiment and engagement for the stock Smith & Nephew is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Smith & Nephew. Analyst Opinions are at a rank of 65 (better than 65% 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 and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Smith & Nephew. But Market Pulse has a low rank of 40, 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 60% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 46, which means that, currently, professional investors hold less stock in this company than in 54% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 51 (more positive than 51% compared with investment alternatives), Smith & Nephew has a reputation among professional investors that is above-average compared with that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Smith & Nephew Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Smith & Nephew shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Smith & Nephew. Price-to-Sales is 63 which means that the stock price compared with what market professionals expect for future sales is lower than for 63% of comparable companies, indicating a good value for Smith & Nephew's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 82% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 68. Compared with other companies in the same industry, dividend yields of Smith & Nephew are expected to be higher than for 82% of all competitors (a Dividend Yield rank of 82). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Smith & Nephew's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Smith & Nephew based on its detailed value metrics.
Growth Strategy: Smith & Nephew Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Smith & Nephew 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 indicators below average for Smith & Nephew. Only Capital Growth has a good rank of 73, which means that currently professionals expect the company to grow its invested capital more than 47% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 26 which means that currently professionals expect the company to grow less than 74% of its competitors. Profit Growth with a rank of 47 and Stock Returns with a rank of 47 are also low (below 53% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Smith & Nephew is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Smith & Nephew Debt Financing Safety above-average
| SAFETY METRICS | February 1, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 43 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 56 |
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ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Smith & Nephew 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 Smith & Nephew 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 just one indicator above average for Smith & Nephew and the other two below average. Refinancing is at 69, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. But Leverage is high with a rank of 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Liquidity is also on the riskier side with a rank of 43, meaning the company generates less profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 56 (better than 56% compared with alternatives), Smith & Nephew has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Smith & Nephew are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Smith & Nephew Top Financial Performance
| COMBINED PERFORMANCE | February 1, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Smith & Nephew (Health Care Equipment, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Smith & Nephew are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives), are safely financed (Safety Rank of 56, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Smith & Nephew's financial characteristics. As the company Smith & Nephew's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 56), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 87% 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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