December 28, 2023
Top 10 Stock Subsea 7 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: Subsea 7 – Top 10 Stock in OBX Index
Subsea 7 is listed as a top 10 stock on December 28, 2023 in the market index OBX Index 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 57 (high 57% performer), Obermatt assesses an overall buy recommendation for Subsea 7 on December 28, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Oil & Gas Equipment |
| Index | Low Emissions, Human Rights, Sound Pay Europe, OBX Index |
| 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 Subsea 7 Buy
| 360 METRICS | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 57 |
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ANALYSIS: With an Obermatt 360° View of 57 (better than 57% compared with alternatives), overall professional sentiment and financial characteristics for the stock Subsea 7 are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Subsea 7. The consolidated Growth Rank has a good rank of 57, 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 57% of competitors in the same industry. The consolidated Safety Rank at 63 means that the company has a financing structure that is safer than 63% 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 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 31, meaning that the share price of Subsea 7 is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 69% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 57, Subsea 7 is better positioned than 57% 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 57), a safe financing structure (Safety Rank of 63), and positive professional market sentiment (Sentiment Rank of 59), 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 Subsea 7 compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (57% better than peers). The value rank could be the reverse reflection of that (43%). 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 Subsea 7 positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock Subsea 7 is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Subsea 7. Analyst Opinions are at a rank of 70 (better than 70% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 55, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Subsea 7. Finally, 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. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), Subsea 7 has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 20, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 80% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Subsea 7 is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Subsea 7 Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Subsea 7 shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Subsea 7. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value concerning Subsea 7's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 66% of alternatives (34% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 39 are lower than average (dividends are expected to be lower than 61% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 9, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Subsea 7's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Subsea 7 may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Subsea 7 Growth Momentum good
| GROWTH METRICS | December 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 57 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 60 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 11 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 89 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 57 |
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ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Subsea 7 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 all but one indicator above average for Subsea 7. Sales Growth has a rank of 57 which means that currently, professionals expect the company to grow more than 57% of its competitors. Both Profit Growth, with a rank of 60, and Stock Returns, with a rank of 89, are also above average. But Capital Growth only has a rank of 11, which means that, currently, professionals expect the company to grow its invested capital less than 89% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Subsea 7 Debt Financing Safety above-average
| SAFETY METRICS | December 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 88 |
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| REFINANCING | ||||||||
| REFINANCING | 41 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 43 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
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ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Subsea 7 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 Subsea 7 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 Subsea 7 and the other two below average. Leverage is at a rank of 88 meaning the company has a below-average debt-to-equity ratio. It has less debt than 88% of its competitors.Refinancing is at a rank of 41, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 59% of its competitors. Liquidity is at a rank of 43, meaning that the company generates less profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 63 (better than 63% compared with alternatives), Subsea 7 has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Subsea 7 are on the safer side. ...read more
Combined financial peformance: Subsea 7 Above-Average Financial Performance
| COMBINED PERFORMANCE | December 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| COMBINED | ||||||||
| COMBINED | 55 |
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ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Subsea 7 (Oil & Gas Equipment, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Subsea 7 are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 63, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Subsea 7's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Subsea 7 exhibits low value (Obermatt Value Rank of 31), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 63) 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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