July 13, 2023
Top 10 Stock Soitec Strong 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: Soitec – Top 10 Stock in Société des Bourses Françaises Index SBF 120
Soitec is listed as a top 10 stock on July 13, 2023 in the market index SBF 120 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 75 (top 75% performer), Obermatt assesses an overall strong buy recommendation for Soitec on July 13, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Semiconductor Equipment |
| Index | CAC All, SBF 120, Employee Focus EU, Renewables Users |
| Size class | 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 Soitec Strong Buy
| 360 METRICS | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 75 |
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ANALYSIS: With an Obermatt 360° View of 75 (better than 75% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Soitec are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Soitec. The consolidated Growth Rank has a good rank of 65, 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 65% of competitors in the same industry. The consolidated Safety Rank at 53 means that the company has a financing structure that is safer than 53% 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 92, which means that professional investors are more optimistic about the stock than for 92% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 28, meaning that the share price of Soitec is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 72% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 75, Soitec is better positioned than 75% 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 65), a safe financing structure (Safety Rank of 53), and positive professional market sentiment (Sentiment Rank of 92), 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 Soitec compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (65% better than peers). The value rank could be the reverse reflection of that (35%). 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 Soitec very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Soitec is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Soitec. Analyst Opinions are at a rank of 83 (better than 83% 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 50, 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 Soitec. The Professional Investors rank is 59, which means that currently, professional investors hold more stock in this company than in 59% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 73 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 73% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Soitec 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 Soitec 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: Soitec Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), Soitec shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Soitec. Price-to-Sales is 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Soitec's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 43, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Soitec. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 34 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 28, is a hold recommendation based on Soitec's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Soitec? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Soitec? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Soitec may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Soitec Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Soitec 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 half of the indicators below and half above average for Soitec. Sales Growth has a rank of 80 which means that currently, professionals expect the company to grow more than 80% of its competitors. Capital Growth is also above 37% of competitors with a rank of 70. But Profit Growth only has a rank of 37, which means that currently professionals expect the company to grow its profits less than 63% of its competitors. And Stock Returns have also been below average with a rank of only 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Soitec Debt Financing Safety above-average
| SAFETY METRICS | July 13, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 41 |
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| REFINANCING | ||||||||
| REFINANCING | 61 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 53 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Soitec 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 Soitec 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 Soitec. Refinancing is at 61, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 61% of its competitors. Liquidity is also good at 53, meaning the company generates more profit to service its debt than 53% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 41, which means the company has an above-average debt-to-equity ratio. It has more debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Soitec has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Soitec could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Soitec Below-Average Financial Performance
| COMBINED PERFORMANCE | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Soitec (Semiconductor Equipment, France) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Soitec are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 53, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on Soitec's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Soitec exhibits low value (Obermatt Value Rank of 28), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 53) 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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