September 7, 2023
Top 10 Stock Alior Bank Hold Recommendation

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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 Alior Bank Hold

360 METRICS	September 7, 2023
VALUE
VALUE	26
GROWTH
GROWTH	80
SAFETY
SAFETY	10
SENTIMENT
SENTIMENT	66
360° VIEW
360° VIEW	45

ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock Alior Bank 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 Alior Bank. The consolidated Growth Rank has a good rank of 80, 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 80% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 66, which means that professional investors are more optimistic about the stock than for 66% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 26, which means that the share price of Alior Bank is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 74% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 10, which means that the company has a financing structure that is riskier than those of 90% 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 45, Alior Bank is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 80), and professional market sentiment is positive (Sentiment Rank of 66), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Alior Bank positive

SENTIMENT METRICS	September 7, 2023
ANALYST OPINION
ANALYST OPINION	13
OPINIONS CHANGE
OPINIONS CHANGE	74
PRO HOLDINGS
PRO HOLDINGS	70
MARKET PULSE
MARKET PULSE	82
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	66

ANALYSIS: With an Obermatt Sentiment Rank of 66 (better than 66% compared with alternatives), overall professional sentiment and engagement for the stock Alior Bank is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Alior Bank. Analyst Opinions are at a rank of 13 (worse than 87% 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 74, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Alior Bank. Even better, the Professional Investors rank is 70, meaning that professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 82, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 82% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 66 (more positive than 66% compared with investment alternatives), Alior Bank has a reputation among professional investors that is above-average compared with that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more

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Value Strategy: Alior Bank Stock Price Value below-average critical

VALUE METRICS	September 7, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	66
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	49
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	27
DIVIDEND YIELD
DIVIDEND YIELD	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26

ANALYSIS: With an Obermatt Value Rank of 26 (worse than 74% compared with alternatives), Alior Bank shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Alior Bank. Price-to-Sales (P/S) is 66, which means that the stock price compared with what market professionals expect for future sales is lower than 66% of comparable companies, indicating a good value concerning to Alior Bank's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 73% of alternatives (only 27% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 26, is a hold recommendation based on Alior Bank's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Alior Bank could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Alior Bank looks like an expensive investment today. ...read more

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Growth Strategy: Alior Bank Growth Momentum high

GROWTH METRICS	September 7, 2023
REVENUE GROWTH
REVENUE GROWTH	17
PROFIT GROWTH
PROFIT GROWTH	94
CAPITAL GROWTH
CAPITAL GROWTH	45
STOCK RETURNS
STOCK RETURNS	97
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	80

ANALYSIS: With an Obermatt Growth Rank of 80 (better than 80% compared with alternatives) for 2023, Alior Bank 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 half of the indicators below and half above average for Alior Bank. Profit Growth has a rank of 94, which means that currently professionals expect the company to grow its profits more than 94% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 97 (above 97% 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 45. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 80, is a buy 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 Alior Bank. ...read more

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Safety Strategy: Alior Bank Debt Financing Safety risky

SAFETY METRICS	September 7, 2023
LEVERAGE
LEVERAGE	64
REFINANCING
REFINANCING	16
LIQUIDITY
LIQUIDITY	32
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	10

ANALYSIS: With an Obermatt Safety Rank of 10 (better than 10% compared with alternatives), the company Alior Bank 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 Alior Bank 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 Alior Bank and the other two below average. Leverage is at a rank of 64 meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors.Refinancing is at a rank of 16, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 84% of its competitors. Liquidity is at a rank of 32, meaning that the company generates less profit to service its debt than 68% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 10 (worse than 90% compared with alternatives), Alior Bank has a financing structure that is significantly riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Alior Bank are on the safer side. ...read more

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Combined financial peformance: Alior Bank Lowest Financial Performance

COMBINED PERFORMANCE	September 7, 2023
VALUE
VALUE	26
GROWTH
GROWTH	80
SAFETY
SAFETY	32
COMBINED
COMBINED	24

ANALYSIS: With an Obermatt Combined Rank of 24 (worse than 76% compared with investment alternatives), Alior Bank (Diversified Banks, Poland) shares have lower financial characteristics compared with similar stocks. Shares of Alior Bank are low in value (priced high) with a consolidated Value Rank of 26 (worse than 74% of alternatives), and are riskily financed (Safety Rank of 10, which means above-average debt burdens) but show above-average growth (Growth Rank of 80). ...read more

RECOMMENDATION: A Combined Rank of 24, is a sell recommendation based on Alior Bank's financial characteristics. As the company Alior Bank shows low value with an Obermatt Value Rank of 26 (74% 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 80% of comparable companies (Obermatt Growth Rank is 80). 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 10 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 Alior Bank, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more

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