January 25, 2024
Top 10 Stock Victrex 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: Victrex – Top 10 Stock in FTSE 350 Index
Victrex is listed as a top 10 stock on January 25, 2024 in the market index FTSE 350 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 84 (top 84% performer), Obermatt assesses an overall strong buy recommendation for Victrex on January 25, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Specialty Chemicals |
| Index | FTSE All Shares, FTSE 250, FTSE 350 |
| Size class | Medium |
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 Victrex Strong Buy
| 360 METRICS | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 30 |
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| 360° VIEW | ||||||||
| 360° VIEW | 84 |
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ANALYSIS: With an Obermatt 360° View of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Victrex are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Victrex. The consolidated Growth Rank has a good rank of 81, 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 81% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 96 which means that the company has a financing structure that is safer than 96% 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 41 which means that the share price of Victrex 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 59% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 30, which means that professional investors are more pessimistic about the stock than for 70% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 84, Victrex is better positioned than 84% 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 81), and the company is safely financed (Safety Rank of 96). However, professional market sentiment is low(Sentiment Rank of 30). The negative market view on Victrex 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 Victrex 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 Victrex only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 30 (better than 30% compared with alternatives), overall professional sentiment and engagement for the stock Victrex is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Victrex. Analyst Opinions are at a rank of 30 (worse than 70% 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 17, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 48, which means that professional investors hold less stock in this company than in 52% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Victrex is Market Pulse, with a rank of 60, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 60% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 30 (less encouraging than 70% compared with investment alternatives), Victrex 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: Victrex Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Victrex 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 below average for Victrex. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 82% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Victrex's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 37 is also low. Compared with invested capital, the stock price is higher than for 63% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Victrex's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Victrex? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Victrex only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Victrex Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, Victrex 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 Victrex. Sales Growth has a value of 66 which means that currently professionals expect the company to grow more than 66% of its competitors. Profit Growth with a value of 78 and Capital Growth with a rank of 69 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 47, which means that stock returns have recently been below 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. Victrex 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 Victrex, 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: Victrex Debt Financing Safety very solid
| SAFETY METRICS | January 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 93 |
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| REFINANCING | ||||||||
| REFINANCING | 36 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2024, the company Victrex has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Victrex 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 Victrex. Leverage is at a rank of 93, meaning the company has a below-average debt-to-equity ratio. It has less debt than 93% of its competitors. Liquidity is also good at a rank of 98, meaning the company generates more profit to service its debt than 98% 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 36, 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 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Victrex 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 Victrex. 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: Victrex Top Financial Performance
| COMBINED PERFORMANCE | January 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| COMBINED | ||||||||
| COMBINED | 94 |
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ANALYSIS: With an Obermatt Combined Rank of 94 (better than 94% compared with investment alternatives), Victrex (Specialty Chemicals, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Victrex are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 96, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 94, is a strong buy recommendation based on Victrex's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Victrex exhibits low value (Obermatt Value Rank of 41), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 96) 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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