June 1, 2023
Top 10 Stock UCB 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: UCB – Top 10 Stock in Belgian 20 Index BEL20
UCB is listed as a top 10 stock on June 01, 2023 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 below average and thus a signal for caution. Based on the Obermatt 360° View of 41 (41% performer), Obermatt assesses an overall hold recommendation for UCB on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Pharmaceuticals |
| Index | BEL20, 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° Assessment UCB Hold
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 76 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| SENTIMENT | ||||||||
| SENTIMENT | 36 |
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| 360° VIEW | ||||||||
| 360° VIEW | 41 |
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ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock UCB are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for UCB. The consolidated Value Rank has an attractive rank of 63, which means that the share price of UCB 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 63% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 76, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 36. Professional investors are more confident in 64% other stocks. Worryingly, the company has risky financing, with a Safety rank of 16. This means 84% of comparable companies have a safer financing structure than UCB. ...read more
RECOMMENDATION: With a 360° View of 41, UCB is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 63 and the Growth Rank above-average at 76, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 36. In addition, the company financing structure is on the riskier side (Safety Rank of 16). While everybody wants to buy at low stock prices (good value), there may be a good reason why UCB's share price is low, namely because professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should 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 UCB only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 36 (better than 36% compared with alternatives), overall professional sentiment and engagement for the stock UCB is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for UCB. Analyst Opinions are at a rank of 46 (worse than 54% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in UCB. Market Pulse is also positive with a rank of 53, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 53% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 41, which means that professional investors hold less stock in this company than in 59% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 36 (less encouraging than 64% compared with investment alternatives), UCB has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or is getting less expensive for what they are. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: UCB Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), UCB shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for UCB. Expected dividend yields are higher than for 61% of comparable companies (a Dividend Yield rank of 61), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 74, which means that the stock price is lower compared with invested capital than for 74% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 45 which means that the stock price compared with what market professionals expect for future profits is higher than for 55% of comparable companies, indicating a low value concerning UCB's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for UCB with a rank of 45. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 55% of comparable companies, indicating a low value concerning UCB's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a BUY recommendation based on UCB's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, UCB may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: UCB Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 76 (better than 76% compared with alternatives) for 2023, UCB shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for UCB. Sales Growth has a value of 58 which means that currently professionals expect the company to grow more than 58% of its competitors. Profit Growth with a value of 78 and Capital Growth with a rank of 61 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 46, which means that stock returns have recently been below 54% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 76, is a BUY recommendation for growth and momentum investors. UCB has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for UCB, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: UCB Debt Financing Safety risky
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 49 |
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| REFINANCING | ||||||||
| REFINANCING | 13 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 37 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
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ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company UCB 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 UCB 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 UCB. Liquidity is at 37, meaning that the company generates less profit to service its debt than 63% 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 49, meaning the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. Finally, Refinancing is at a rank of 13 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 87% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 16 (worse than 84% compared with alternatives), UCB 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. ...read more
Combined financial peformance: UCB Above-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 76 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| COMBINED | ||||||||
| COMBINED | 57 |
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ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), UCB (Pharmaceuticals, Belgium) shares have above-average financial characteristics compared with similar stocks. Shares of UCB are a good value (attractively priced) with a consolidated Obermatt Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 76) but are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 57, is a buy recommendation based on UCB's financial characteristics. As the company UCB's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 63) and above-average growth (Obermatt Growth Rank of 76), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 16) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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