June 1, 2023
Top 10 Stock KBC 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: KBC – Top 10 Stock in Belgian 20 Index BEL20
KBC is listed as a top 10 stock on June 01, 2023 in the market index BEL20 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 4 (4% performer), Obermatt issues an overall sell recommendation for KBC on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Diversified Banks |
| Index | BEL20, Diversity Europe, Human Rights, Renewables Users, SDG 12, SDG 13, SDG 3, SDG 7, SDG 8 |
| Size class | X-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° Assessment KBC Sell
| 360 METRICS | June 1, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 42 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 24 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 28 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 23 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 4 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 4 (better than 4% compared with alternatives), overall professional sentiment and engagement for the stock KBC are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for KBC. The consolidated Value Rank has a low rank of 42 which means that the share price of KBC 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 58% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 24, 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 24% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 28, which means that the company has a riskier financing structure than 72% 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 23, which means that professional investors are more pessimistic about the stock than for 77% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 4, KBC is worse than 96% of all alternative stock investment opportunities based on the Obermatt Method. This means that KBC 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 23. The negative market view on KBC 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 KBC 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 KBC negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock KBC is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for KBC. Analyst Opinions are at a rank of 8 (worse than 92% 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 71 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in KBC. Market Pulse is also positive with a rank of 80, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 80% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 37, which means that professional investors hold less stock in this company than in 63% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), KBC has a reputation among professional investors that is far below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or is getting less expensive for what they are. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: KBC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 42 (worse than 58% compared with alternatives), KBC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for KBC. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value concerning KBC's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 77, which means that dividends are expected to be higher than 77% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 75% of alternatives (only 25% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than 65% 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 42, is a HOLD recommendation based on KBC's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: KBC Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 24 (better than 24% compared with alternatives), KBC 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 KBC. 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 67. But Capital Growth has only a rank of 9, which means that currently professionals expect the company to grow its invested capital less than 91% of its competitors. Profit Growth is also low, with a rank of only 27, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 24, is a SELL 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 67% 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
Safety Strategy: KBC Debt Financing Safety below-average
| SAFETY METRICS | June 1, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 66 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 22 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 52 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company KBC 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 KBC 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 two out of three indicators above average for KBC. Leverage is at a rank of 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Liquidity is also good at a rank of 52, meaning the company generates more profit to service its debt than 52% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 22, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 78% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 28 (worse than 72% compared with alternatives), KBC has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for KBC. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: KBC Lowest Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 42 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 24 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 52 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 18 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), KBC (Diversified Banks, Belgium) shares have lower financial characteristics compared with similar stocks. Shares of KBC are low in value (priced high) with a consolidated Obermatt Value Rank of 42 (worse than 58% of alternatives), show below-average growth (Growth Rank of 24), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 18, is a sell recommendation based on KBC's financial characteristics. As the company KBC's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 42), low growth (Obermatt Growth Rank of 24), and risky financing practices (Obermatt Safety Rank of 28), 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.