September 14, 2023
Top 10 Stock BKW 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 BKW Hold

360 METRICS	September 14, 2023
VALUE
VALUE	30
GROWTH
GROWTH	43
SAFETY
SAFETY	92
SENTIMENT
SENTIMENT	20
360° VIEW
360° VIEW	43

ANALYSIS: With an Obermatt 360° View of 43 (better than 43% compared with alternatives), overall professional sentiment and financial characteristics for the stock BKW are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for BKW. The only rank that is above average is the consolidated Safety Rank at 92, which means that the company has a financing structure that is safer than those of 92% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 30, which means that the share price of BKW is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 43, which implies 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. Finally, the consolidated Sentiment Rank is also low at a rank of 20, which means that professional investors are more pessimistic about the stock than for 80% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more

RECOMMENDATION: With a consolidated 360° View of 43, BKW is worse than 57% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 20. The negative market view on BKW may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today 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 visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for BKW negative

SENTIMENT METRICS	September 14, 2023
ANALYST OPINION
ANALYST OPINION	13
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	56
MARKET PULSE
MARKET PULSE	23
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	20

ANALYSIS: With an Obermatt Sentiment Rank of 20 (better than 20% compared with alternatives), overall professional sentiment and engagement for the stock BKW 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 BKW. 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 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 BKW. More encouragingly, the Professional Investors rank is 56, which means that professional investors hold more stock in this company than in 56% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 23, 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 77% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 20 (less encouraging than 80% compared with investment alternatives), BKW has a reputation among professional investors that is far below that of its competitors. The sentiment signals are mixed for BKW. 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

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Value Strategy: BKW Stock Price Value below-average critical

VALUE METRICS	September 14, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	47
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	26
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	37
DIVIDEND YIELD
DIVIDEND YIELD	28
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	30

ANALYSIS: With an Obermatt Value Rank of 30 (worse than 70% compared with alternatives), BKW shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for BKW. Price-to-Sales is 47 which means that the stock price compared with what market professionals expect for future profits is higher than 53% of comparable companies, indicating a low value concerning BKW's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 37, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of BKW. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 26 and Dividend Yield, which is lower than 72% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 30, is a hold recommendation based on BKW's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for BKW? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as BKW? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. BKW may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more

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Growth Strategy: BKW Growth Momentum low

GROWTH METRICS	September 14, 2023
REVENUE GROWTH
REVENUE GROWTH	52
PROFIT GROWTH
PROFIT GROWTH	17
CAPITAL GROWTH
CAPITAL GROWTH	38
STOCK RETURNS
STOCK RETURNS	85
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	43

ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), BKW 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 BKW. Sales Growth has a rank of 52 which means that currently professionals expect the company to grow more than 52% of its competitors. Stock Returns are also above average with a rank of 85. But Capital Growth has only a rank of 38, which means that currently professionals expect the company to grow its invested capital less than 62% of its competitors. Profit Growth is also low, with a rank of only 17, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 85% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more

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Safety Strategy: BKW Debt Financing Safety very solid

SAFETY METRICS	September 14, 2023
LEVERAGE
LEVERAGE	92
REFINANCING
REFINANCING	53
LIQUIDITY
LIQUIDITY	96
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	92

ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2023, the company BKW has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of BKW 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 all three are above average for BKW. Leverage is at 92, meaning the company has a below-average debt-to-equity ratio. It has less debt than 92% of its competitors. Refinancing is at a rank of 53, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 53% of its competitors. Finally, Liquidity is also good at a rank of 96, which means that the company generates more profit to service its debt than 96% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), BKW has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more

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Combined financial peformance: BKW Above-Average Financial Performance

COMBINED PERFORMANCE	September 14, 2023
VALUE
VALUE	30
GROWTH
GROWTH	43
SAFETY
SAFETY	96
COMBINED
COMBINED	59

ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), BKW (Electric Utilities, Switzerland) shares have above-average financial characteristics compared with similar stocks. Shares of BKW are low in value (priced high) with a consolidated Value Rank of 30 (worse than 70% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 92), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on BKW's financial characteristics. As the company BKW's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 30) and low growth (Obermatt Growth Rank of 43), 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. In this case, good financing practices (Obermatt Safety Rank of 92) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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