September 21, 2023
Top 10 Stock Keppel Sell 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 Keppel Sell

360 METRICS	September 21, 2023
VALUE
VALUE	32
GROWTH
GROWTH	39
SAFETY
SAFETY	20
SENTIMENT
SENTIMENT	80
360° VIEW
360° VIEW	22

ANALYSIS: With an Obermatt 360° View of 22 (better than 22% compared with alternatives), overall professional sentiment and financial characteristics for the stock Keppel are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Keppel. The consolidated Sentiment Rank has a good rank of 80, which means that professional investors are more optimistic about the stock than for 80% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 32, which means that the share price of Keppel is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 39, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 39% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 20 which means that the company has a riskier financing structure than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more

RECOMMENDATION: With a consolidated 360° View of 22, Keppel is worse than 78% of all alternative stock investment opportunities based on the Obermatt Method. This means that Keppel shares are on the riskier side for investors. As only the professional market sentiment (Sentiment Rank of 80) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Keppeḷ is bright. A small investment might be justified, but proceed with caution. ...read more

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Sentiment Strategy: Professional Market Sentiment for Keppel very positive

SENTIMENT METRICS	September 21, 2023
ANALYST OPINION
ANALYST OPINION	41
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	96
MARKET PULSE
MARKET PULSE	61
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	80

ANALYSIS: With an Obermatt Sentiment Rank of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Keppel is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Keppel. Analyst Opinions are at a rank of 41 (worse than 59% 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 indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Keppel. Even better, the Professional Investors rank is 96, meaning that professional investors hold more stock in this company than in 96% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 61, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 61% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 80 (more positive than 80% compared with investment alternatives), Keppel 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: Keppel Stock Price Value below-average critical

VALUE METRICS	September 21, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	38
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	46
DIVIDEND YIELD
DIVIDEND YIELD	94
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	32

ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Keppel 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 Keppel. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 94% 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 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Keppel's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 38 which means that the stock price compared with what market professionals expect for future profit levels is higher than 62% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 46 is also low. Compared with invested capital, the stock price is higher than for 54% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on Keppel's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Keppel? 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 Keppel only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: Keppel Growth Momentum low

GROWTH METRICS	September 21, 2023
REVENUE GROWTH
REVENUE GROWTH	6
PROFIT GROWTH
PROFIT GROWTH	34
CAPITAL GROWTH
CAPITAL GROWTH	68
STOCK RETURNS
STOCK RETURNS	79
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	39

ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Keppel 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 Keppel. Capital Growth has a rank of 68, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 79 (above 79% of alternative investments). But Sales Growth has only a rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors, and Profit Growth is also low at a rank of 34. ...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 Keppel, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more

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Safety Strategy: Keppel Debt Financing Safety risky

SAFETY METRICS	September 21, 2023
LEVERAGE
LEVERAGE	28
REFINANCING
REFINANCING	23
LIQUIDITY
LIQUIDITY	20
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	20

ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Keppel has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Keppel 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 all three metrics below average for Keppel. Liquidity is at 20, meaning that the company generates less profit to service its debt than 80% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 28, meaning the company has an above-average debt-to-equity ratio. It has more debt than 72% of its competitors. Finally, Refinancing is at a rank of 23 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 77% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Keppel has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.

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Combined financial peformance: Keppel Lowest Financial Performance

COMBINED PERFORMANCE	September 21, 2023
VALUE
VALUE	32
GROWTH
GROWTH	39
SAFETY
SAFETY	20
COMBINED
COMBINED	10

ANALYSIS: With an Obermatt Combined Rank of 10 (worse than 90% compared with investment alternatives), Keppel (Industrial Conglomerates, Singapore) shares have lower financial characteristics compared with similar stocks. Shares of Keppel are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 10, is a sell recommendation based on Keppel's financial characteristics. As the company Keppel's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 32), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 20), 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

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