October 19, 2023
Top 10 Stock Banco de Chile Sell 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: Banco de Chile – Top 10 Stock in Indice de Precio Selectivo de Acciones
Banco de Chile is listed as a top 10 stock on October 19, 2023 in the market index IPSA because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 17 (17% performer), Obermatt issues an overall sell recommendation for Banco de Chile on October 19, 2023.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Diversified Banks |
| Index | IPSA, Renewables Users |
| 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 Banco de Chile Sell
| 360 METRICS | October 19, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 41 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 39 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 29 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 37 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 17 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 17 (better than 17% compared with alternatives), overall professional sentiment and financial characteristics for the stock Banco de Chile are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for Banco de Chile. The consolidated Value Rank has a low rank of 41 which means that the share price of Banco de Chile 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 59% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 39, which means that the company exhibits below-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 lower than for 39% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 29, which means that the company has a riskier financing structure than 71% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 37, which means that professional investors are more pessimistic about the stock than for 63% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 17, Banco de Chile is worse than 83% of all alternative stock investment opportunities based on the Obermatt Method. This means that Banco de Chile shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 37. The negative market view on Banco de Chile may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While Banco de Chile may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for Banco de Chile only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock Banco de Chile is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Banco de Chile. Analyst Opinions are at a rank of 17 (worse than 83% 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 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Banco de Chile. More encouragingly, the Professional Investors rank is 63, which means that professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 42, 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 58% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 37 (less encouraging than 63% compared with investment alternatives), Banco de Chile has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Banco de Chile. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Banco de Chile Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Banco de Chile 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 Banco de Chile. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 92% 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 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Banco de Chile's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 29 which means that the stock price compared with what market professionals expect for future profit levels is higher than 71% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 18 is also low. Compared with invested capital, the stock price is higher than for 82% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Banco de Chile's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Banco de Chile? 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 Banco de Chile only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Banco de Chile Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Banco de Chile 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 Banco de Chile. Capital Growth has a rank of 93, which means that currently professionals expect the company to grow its invested capital more than 6% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 71 (above 71% of alternative investments). But Sales Growth has only a rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Profit Growth is also low at a rank of 6. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Banco de Chile, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Banco de Chile Debt Financing Safety below-average
| SAFETY METRICS | October 19, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 16 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 83 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 29 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company Banco de Chile 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 Banco de Chile 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 Banco de Chile and the other two below average. Refinancing is at 83, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 83% of its competitors. But Leverage is high with a rank of 16, meaning the company has an above-average debt-to-equity ratio. It has more debt than 84% of its competitors. Liquidity is also on the riskier side with a rank of 26, meaning the company generates less profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), Banco de Chile 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 Banco de Chile 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: Banco de Chile Lowest Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 41 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 39 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 26 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 15 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 15 (worse than 85% compared with investment alternatives), Banco de Chile (Diversified Banks, Chile) shares have lower financial characteristics compared with similar stocks. Shares of Banco de Chile are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 29), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 15, is a sell recommendation based on Banco de Chile's financial characteristics. As the company Banco de Chile's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 41), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.