January 18, 2024
Top 10 Stock Verbund 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: Verbund – Top 10 Stock in Sound Pay Practices in Europe
Verbund is listed as a top 10 stock on January 18, 2024 in the market index Sound Pay Europe because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Verbund on January 18, 2024.
Snapshot: Obermatt Ranks
| Country | Austria |
| Industry | Electric Utilities |
| Index | ATX, Low Emissions, Employee Focus EU, Diversity Europe, 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 Verbund Buy
| 360 METRICS | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 87 |
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| SENTIMENT | ||||||||
| SENTIMENT | 5 |
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| 360° VIEW | ||||||||
| 360° VIEW | 63 |
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ANALYSIS: With an Obermatt 360° View of 63 (better than 63% compared with alternatives), overall professional sentiment and financial characteristics for the stock Verbund are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Verbund. The consolidated Growth Rank has a good rank of 95, 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 95% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 87 which means that the company has a financing structure that is safer than 87% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 37 which means that the share price of Verbund is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 63% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 5, which means that professional investors are more pessimistic about the stock than for 95% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Verbund is better positioned than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 95), and the company is safely financed (Safety Rank of 87). However, professional market sentiment is low(Sentiment Rank of 5). The negative market view on Verbund 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 board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Verbund compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred 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 if the value rank is above 60. As market sentiment is low, 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 Verbund negative
ANALYSIS: With an Obermatt Sentiment Rank of 5 (better than 5% compared with alternatives), overall professional sentiment and engagement for the stock Verbund is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Verbund. Analyst Opinions are at a rank of 2 (worse than 98% 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 26 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 32, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 68% of competitors). No wonder, the Professional Investors rank is only 47, which means that professional investors hold less stock in this company than in 53% of alternative investment opportunities. Pros tend to stay away from Verbund, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 5 (less encouraging than 95% compared with investment alternatives), Verbund has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Verbund Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Verbund shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Verbund. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Verbund's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 59% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 50 (dividends are expected to be higher than 50% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 84% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Verbund to 16. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Verbund's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Verbund Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Verbund 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 Verbund. Profit Growth has a rank of 70 which means that currently professionals expect the company to grow its profits more than 70% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 91, and Stock Returns has a rank of 73 which means that the stock returns have recently been above 73% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 31 (69% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Verbund Debt Financing Safety very solid
| SAFETY METRICS | January 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 88 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 95 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 87 |
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ANALYSIS: With an Obermatt Safety Rank of 87 (better than 87% compared with alternatives) for 2024, the company Verbund has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Verbund 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 two out of three indicators above average for Verbund. 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. Liquidity is also good at a rank of 95, meaning the company generates more profit to service its debt than 95% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 39, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 87 (better than 87% compared with alternatives), Verbund has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Verbund. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Verbund Top Financial Performance
| COMBINED PERFORMANCE | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 95 |
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| COMBINED | ||||||||
| COMBINED | 92 |
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ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Verbund (Electric Utilities, Austria) shares have much better financial characteristics than comparable stocks. Shares of Verbund are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives). But they show above-average growth (Growth Rank of 95) and are safely financed (Safety Rank of 87, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Verbund's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Verbund exhibits low value (Obermatt Value Rank of 37), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 95). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 87) 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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