January 11, 2024
Top 10 Stock Umicore 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: Umicore – Top 10 Stock in Belgian 20 Index BEL20
Umicore 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. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for Umicore on January 11, 2024.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Specialty Chemicals |
| Index | BEL20, Human Rights, Recycling, Solar Tech |
| 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 Umicore Hold
| 360 METRICS | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock Umicore are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Umicore. 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. It ranks higher than 65% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 41 means that the share price of Umicore is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 59% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 40, which means that the company has a riskier financing structure than 60% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 30, indicating professional investors are more pessimistic about the stock than for 70% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, Umicore is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 65), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 30), the company is rather risky when it comes to financing (Safety Rank of 40). The negative market view on Umicore may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Umicore compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Umicore only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock Umicore is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Umicore. Analyst Opinions are at a rank of 34 (worse than 66% 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 18, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 28, which means that professional investors hold less stock in this company than in 72% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Umicore is Market Pulse, with a rank of 77, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), Umicore 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: Umicore Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Umicore shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Umicore. Price-to-Profit (also referred to as price-earnings, P/E) is 60 which means that the stock price compared with what market professionals expect for future profits is lower than for 60% of comparable companies, indicating a good value concerning Umicore's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 45, which means that the stock price is lower as regards to invested capital than for 45% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 24% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Umicore's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Umicore Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Umicore 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 Umicore. Sales Growth has a value of 73 which means that currently professionals expect the company to grow more than 73% of its competitors. Profit Growth with a value of 52 and Capital Growth with a rank of 74 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 23, which means that stock returns have recently been below 77% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Umicore 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 Umicore, 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: Umicore Debt Financing Safety below-average
| SAFETY METRICS | January 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 27 |
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| REFINANCING | ||||||||
| REFINANCING | 72 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 40 |
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ANALYSIS: With an Obermatt Safety Rank of 40 (better than 40% compared with alternatives), the company Umicore has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Umicore 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 just one indicator above average for Umicore and the other two below average. Refinancing is at 72, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 72% of its competitors. But Leverage is high with a rank of 27, meaning the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. Liquidity is also on the riskier side with a rank of 39, meaning the company generates less profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 40 (worse than 60% compared with alternatives), Umicore has a financing structure that is riskier 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 Umicore 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: Umicore Above-Average Financial Performance
| COMBINED PERFORMANCE | January 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 52 |
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ANALYSIS: With an Obermatt Combined Rank of 52 (better than 52% compared with investment alternatives), Umicore (Specialty Chemicals, Belgium) shares have above-average financial characteristics compared with similar stocks. Shares of Umicore are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), and are riskily financed (Safety Rank of 40, which means above-average debt burdens) but show above-average growth (Growth Rank of 65). ...read more
RECOMMENDATION: A Combined Rank of 52, is a buy recommendation based on Umicore's financial characteristics. As the company Umicore shows low value with an Obermatt Value Rank of 41 (59% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 65% of comparable companies (Obermatt Growth Rank is 65). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 40 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Umicore, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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