February 22, 2024
Top 10 Stock Vallourec 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: Vallourec – Top 10 Stock in Société des Bourses Françaises Index SBF 120
Vallourec is listed as a top 10 stock on February 22, 2024 in the market index SBF 120 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Vallourec on February 22, 2024.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Oil & Gas Equipment |
| Index | CAC All, SBF 120, Employee Focus EU, Energy Efficient, Sound Pay Europe |
| 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 Vallourec Strong Buy
| 360 METRICS | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 22 |
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| SENTIMENT | ||||||||
| SENTIMENT | 98 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Vallourec are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Vallourec. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Vallourec is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 96% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 98, which means that professional investors are more optimistic about the stock than for 98% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 41, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 22, meaning the company has a riskier financing structure than 78 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 77, Vallourec is better positioned than 77% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 96) and positive market sentiment in the professional investor community (Sentiment Rank of 98), but growth expectations are below-average (Growth Rank of 41) and the financing structure is on the risky side(Safety Rank of 22). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Vallourec is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Vallourec very positive
ANALYSIS: With an Obermatt Sentiment Rank of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Vallourec is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Vallourec. Analyst Opinions are at a rank of 93 (better than 93% 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 85, 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 Vallourec. Finally, the Professional Investors rank is 80, which means that currently, professional investors hold more stock in this company than in 80% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 98 (more positive than 98% compared with investment alternatives), Vallourec has a reputation among professional investors that is significantly higher than 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 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Vallourec 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: Vallourec Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, Vallourec shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Vallourec. Price-to-Sales is 70 which means that the stock price compared with what market professionals expect for future sales is lower than for 70% of comparable companies, indicating a good value for Vallourec's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 100% 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 66. Compared with other companies in the same industry, dividend yields of Vallourec are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Vallourec'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 Vallourec based on its detailed value metrics.
Growth Strategy: Vallourec Growth Momentum low
| GROWTH METRICS | February 22, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 17 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 89 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 17 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 51 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 41 |
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ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Vallourec shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Vallourec. Profit Growth has a rank of 89, which means that currently professionals expect the company to grow its profits more than 89% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 51 (above 51% of alternative investments). But Sales Growth has a below the median rank of 17, which means that, currently, professionals expect the company to grow less than 83% of its competitors, and Capital Growth also has a lower rank of 17. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 41, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Vallourec. ...read more
Safety Strategy: Vallourec Debt Financing Safety risky
| SAFETY METRICS | February 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 12 |
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| REFINANCING | ||||||||
| REFINANCING | 79 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 82 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 22 |
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ANALYSIS: With an Obermatt Safety Rank of 22 (better than 22% compared with alternatives), the company Vallourec 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 Vallourec 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 two out of three indicators above-average for Vallourec. Refinancing is at 79, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. Liquidity is also good at 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 12, which means the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 22 (worse than 78% compared with alternatives), Vallourec has a financing structure that is significantly riskier 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 Vallourec 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: Vallourec Above-Average Financial Performance
| COMBINED PERFORMANCE | February 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| COMBINED | ||||||||
| COMBINED | 60 |
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ANALYSIS: With an Obermatt Combined Rank of 60 (better than 60% compared with investment alternatives), Vallourec (Oil & Gas Equipment, France) shares have above-average financial characteristics compared with similar stocks. Shares of Vallourec are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives) but show below-average growth (Growth Rank of 41), and are riskily financed (Safety Rank of 22), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 60, is a buy recommendation based on Vallourec's financial characteristics. As the company Vallourec's key financial metrics exhibit good value (Obermatt Value Rank of 96) but low growth (Obermatt Growth Rank of 41) and risky financing practices (Obermatt Safety Rank of 22), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 96% of comparable companies, may indicate 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. ...read more
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