January 11, 2024
Top 10 Stock Solvay 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: Solvay – Top 10 Stock in Belgian 20 Index BEL20
Solvay is listed as a top 10 stock on January 11, 2024 in the market index BEL20 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 59 (high 59% performer), Obermatt assesses an overall buy recommendation for Solvay on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Diversified Chemicals |
| Index | BEL20, CAC All, SBF 120, Dividends Europe, Energy Efficient, Diversity Europe |
| Size class | XX-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 Solvay Buy
| 360 METRICS | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° View of 59 (better than 59% compared with alternatives), overall professional sentiment and financial characteristics for the stock Solvay are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Solvay. The consolidated Value Rank has an attractive rank of 95, which means that the share price of Solvay is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 95% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 72. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 30. Professional investors are more confident in 70% other stocks. The consolidated Growth Rank also has a low rank of 13, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 87 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 59, Solvay is better positioned than 59% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 95), and the financing structure is on the safer side (Safety Rank of 72). However, sentiment in the professional investor community is below-average (Sentiment Rank of 30), as is the growth momentum for the company (Growth Rank of 13). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Solvay only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock Solvay is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Solvay. Analyst Opinions are at a rank of 22 (worse than 78% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 12, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 72, which means that professional investors hold more stock in this company than in 72% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 50, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 50% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Solvay and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), Solvay has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Solvay Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 95 (better than 95% compared with alternatives) for 2024, Solvay shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Solvay. Price-to-Sales is 65 which means that the stock price compared with what market professionals expect for future sales is lower than for 65% of comparable companies, indicating a good value for Solvay's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 93% 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 74. Compared with other companies in the same industry, dividend yields of Solvay are expected to be higher than for 100% of all competitors (a Dividend Yield rank of 100). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 95, is a buy recommendation based on Solvay'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 Solvay based on its detailed value metrics.
Growth Strategy: Solvay Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Solvay 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 Solvay. Sales Growth has a below market rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors. The same is valid for Capital Growth, with a rank of 4, and Profit Growth, with a rank of 26. Currently, professionals expect the company to grow its profits less than 74% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 81, which means that the stock returns have recently been above 81% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, 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 Solvay, 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: Solvay Debt Financing Safety above-average
| SAFETY METRICS | January 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 71 |
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| REFINANCING | ||||||||
| REFINANCING | 58 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 72 |
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ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company Solvay 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 Solvay 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 Solvay. Leverage is at 71, meaning the company has a below-average debt-to-equity ratio. It has less debt than 71% of its competitors. Refinancing is at a rank of 58, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. Finally, Liquidity is also good at a rank of 61, which means that the company generates more profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), Solvay has a financing structure that is 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: Solvay Top Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 95 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Solvay (Diversified Chemicals, Belgium) shares have much better financial characteristics than comparable stocks. Shares of Solvay are a good value (attractively priced) with a consolidated Value Rank of 95 (better than 95% of alternatives), are safely financed (Safety Rank of 72, which means low debt burdens), but show below-average growth (Growth Rank of 13). ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Solvay's financial characteristics. As the company Solvay's key financial metrics exhibit good value (Obermatt Value Rank of 95) but low growth (Obermatt Growth Rank of 13) while being safely financed (Obermatt Safety Rank of 72), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 95% 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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