July 20, 2023
Top 10 Stock BAWAG 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: BAWAG – Top 10 Stock in Diversity Leaders in Europe
BAWAG is listed as a top 10 stock on July 20, 2023 in the market index Diversity Europe because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for BAWAG on July 20, 2023.
Snapshot: Obermatt Ranks
| Country | Austria |
| Industry | Diversified Banks |
| Index | ATX, Dividends Europe, Diversity Europe |
| Size class | 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 BAWAG Buy
| 360 METRICS | July 20, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 16 |
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| SAFETY | ||||||||
| SAFETY | 60 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock BAWAG are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for BAWAG. The consolidated Value Rank has an attractive rank of 72, which means that the share price of BAWAG is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 72% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 60. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 65. But the consolidated Growth Rank has a low rank of 16, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 84 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 51, BAWAG is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 72), secure financing practices (Safety Rank of 60), and positive market sentiment in the professional investor community (Sentiment Rank of 65). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 16), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of BAWAG is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for BAWAG positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock BAWAG is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for BAWAG. Analyst Opinions are at a rank of 77 (better than 77% 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 63, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 67, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 67% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 32, which means that currently, professional investors hold less stock in this company than in 68% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), BAWAG has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in BAWAG may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in BAWAG. ...read more
Value Strategy: BAWAG Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% compared with alternatives), BAWAG shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for BAWAG. Price-to-Profit (also referred to as price-earnings, P/E) is 86 which means that the stock price compared with what market professionals expect for future profits is lower than for 86% of comparable companies, indicating a good value concerning BAWAG's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 49, which means that the stock price is lower as regards to invested capital than for 49% of comparable investments. On the other hand, Price-to-Sales is less favorable than 57% of alternatives (only 43% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 0% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 72, is a buy recommendation based on BAWAG's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: BAWAG Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 16 (better than 16% compared with alternatives), BAWAG shows one of the most restricted growth dynamics in its industry. There is little 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 BAWAG. Sales Growth has a rank of 50, which means that, currently, professionals expect the company to grow more than 50% of its competitors. Profit Growth with a rank of 56 is also above average. But Capital Growth has only a rank of 17, and Stock Returns with 17 are also below-average. Stock returns for BAWAG have recently been below 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 16, is a sell recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for BAWAG. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: BAWAG Debt Financing Safety above-average
| SAFETY METRICS | July 20, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 76 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 60 |
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ANALYSIS: With an Obermatt Safety Rank of 60 (better than 60% compared with alternatives), the company BAWAG has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of BAWAG 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 where two out of three are above average for BAWAG.Leverage is at 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors.Refinancing is at a rank of 76, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 76% of its competitors. Liquidity is at 27, meaning that the company generates less profit to service its debt than 73% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 60 (better than 60% compared with alternatives), BAWAG has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: BAWAG Below-Average Financial Performance
| COMBINED PERFORMANCE | July 20, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 16 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), BAWAG (Diversified Banks, Austria) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of BAWAG are a good value (attractively priced) with a consolidated Value Rank of 72 (better than 72% of alternatives), are safely financed (Safety Rank of 60, which means low debt burdens), but show below-average growth (Growth Rank of 16). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on BAWAG's financial characteristics. As the company BAWAG's key financial metrics exhibit good value (Obermatt Value Rank of 72) but low growth (Obermatt Growth Rank of 16) while being safely financed (Obermatt Safety Rank of 60), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 72% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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