September 21, 2023
Top 10 Stock Kainos Group Strong Buy 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 Kainos Group Strong Buy

360 METRICS	September 21, 2023
VALUE
VALUE	31
GROWTH
GROWTH	57
SAFETY
SAFETY	95
SENTIMENT
SENTIMENT	75
360° VIEW
360° VIEW	83

ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Kainos Group are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Kainos Group. The consolidated Growth Rank has a good rank of 57, 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 57% of competitors in the same industry. The consolidated Safety Rank at 95 means that the company has a financing structure that is safer than 95% 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 good rank of 75, which means that professional investors are more optimistic about the stock than for 75% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 31, meaning that the share price of Kainos Group is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 69% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 83, Kainos Group is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 57), a safe financing structure (Safety Rank of 95), and positive professional market sentiment (Sentiment Rank of 75), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of Kainos Group compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (57% better than peers). The value rank could be the reverse reflection of that (43%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the 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 Kainos Group very positive

SENTIMENT METRICS	September 21, 2023
ANALYST OPINION
ANALYST OPINION	19
OPINIONS CHANGE
OPINIONS CHANGE	62
PRO HOLDINGS
PRO HOLDINGS	94
MARKET PULSE
MARKET PULSE	62
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	75

ANALYSIS: With an Obermatt Sentiment Rank of 75 (better than 75% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Kainos Group is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Kainos Group. Analyst Opinions are at a rank of 19 (worse than 81% 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 62, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Kainos Group. Even better, the Professional Investors rank is 94, meaning that professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 62, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 62% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 75 (more positive than 75% compared with investment alternatives), Kainos Group has a reputation among professional investors that is significantly higher than 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: Kainos Group Stock Price Value below-average critical

VALUE METRICS	September 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	23
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	32
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10
DIVIDEND YIELD
DIVIDEND YIELD	67
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	31

ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), Kainos Group 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 Kainos Group. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 67% 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 23 which means that the stock price compared with what market professionals expect for future profits is higher than 77% of comparable companies, indicating a low value concerning Kainos Group's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 32 which means that the stock price compared with what market professionals expect for future profit levels is higher than 68% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 10 is also low. Compared with invested capital, the stock price is higher than for 90% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on Kainos Group's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Kainos Group? 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 Kainos Group only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: Kainos Group Growth Momentum good

GROWTH METRICS	September 21, 2023
REVENUE GROWTH
REVENUE GROWTH	77
PROFIT GROWTH
PROFIT GROWTH	46
CAPITAL GROWTH
CAPITAL GROWTH	41
STOCK RETURNS
STOCK RETURNS	37
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	57

ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), Kainos Group shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Kainos Group. While Sales Growth ranks at 77, professionals currently expect the company to grow more than 77% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 46, which means that, currently, professionals expect the company to grow its profits less than 54% of its competitors, and Capital Growth has a low rank of 41. Historic stock returns were also below average with a current Stock Returns rank of 37 which means that the stock returns have recently been below 63% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more

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Safety Strategy: Kainos Group Debt Financing Safety very solid

SAFETY METRICS	September 21, 2023
LEVERAGE
LEVERAGE	86
REFINANCING
REFINANCING	54
LIQUIDITY
LIQUIDITY	100
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	95

ANALYSIS: With an Obermatt Safety Rank of 95 (better than 95% compared with alternatives) for 2023, the company Kainos Group has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Kainos Group 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 Kainos Group. Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors. Refinancing is at a rank of 54, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 95 (better than 95% compared with alternatives), Kainos Group 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: Kainos Group Top Financial Performance

COMBINED PERFORMANCE	September 21, 2023
VALUE
VALUE	31
GROWTH
GROWTH	57
SAFETY
SAFETY	100
COMBINED
COMBINED	77

ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% compared with investment alternatives), Kainos Group (IT Consulting & oth. Services, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Kainos Group are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 95, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Kainos Group's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Kainos Group exhibits low value (Obermatt Value Rank of 31), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 95) 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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