August 17, 2023
Top 10 Stock Kesko 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: Kesko – Top 10 Stock in Optionsmäklarna Helsinki Stock Exchange Helsinki Index OMX 25
Kesko is listed as a top 10 stock on August 17, 2023 in the market index OMX 25 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 14 (14% performer), Obermatt issues an overall sell recommendation for Kesko on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Food Retail |
| Index | OMX 25, Dividends Europe, Employee Focus EU, Renewables Users |
| Size class | XX-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 Kesko Sell
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 29 |
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| 360° VIEW | ||||||||
| 360° VIEW | 14 |
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ANALYSIS: With an Obermatt 360° View of 14 (better than 14% compared with alternatives), overall professional sentiment and financial characteristics for the stock Kesko are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Kesko. Only the consolidated Value Rank has an attractive rank of 51, which means that the share price of Kesko is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 51% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 13, 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. The consolidated Safety Rank has a riskier rank of 49, meaning the company has a riskier financing structure than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 71% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 29. ...read more
RECOMMENDATION: With a consolidated 360° View of 14, Kesko is worse than 86% of all alternative stock investment opportunities based on the Obermatt Method. This means that Kesko shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 51. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 13), a riskier financing structure than the competition (Safety Rank of 49), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 29) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Kesko is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Kesko. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Kesko only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock Kesko is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Kesko. Analyst Opinions are at a rank of 49 (worse than 51% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 13, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 46, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 54% of competitors). On the upside, the Professional Investors rank is 52, which means that professional investors hold more stock in this company than in 52% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 29 (less encouraging than 71% compared with investment alternatives), Kesko has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Kesko stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Kesko Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), Kesko shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Kesko. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 92% 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 35 which means that the stock price compared with what market professionals expect for future profits is higher than 65% of comparable companies, indicating a low value concerning Kesko's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 42 which means that the stock price compared with what market professionals expect for future profit levels is higher than 58% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 33 is also low. Compared with invested capital, the stock price is higher than for 67% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on Kesko's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Kesko? 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 Kesko only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Kesko Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Kesko 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 all four metrics below average for Kesko. Sales Growth has a rank of 26, which means that currently professionals expect the company to grow less than 74% of its competitors. The same is valid for Profit Growth, with a rank of 34, and Capital Growth with 19. In addition, Stock Returns have a below market rank of 11, which means that the stock returns have recently been below 89% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Kesko Debt Financing Safety below-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 25 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Kesko 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 Kesko 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 Kesko. Leverage is at a rank of 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Liquidity is also good at a rank of 76, meaning the company generates more profit to service its debt than 76% 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 25, 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 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), Kesko 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 Kesko. 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: Kesko Lowest Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 51 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 17 |
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ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), Kesko (Food Retail, Finland) shares have lower financial characteristics compared with similar stocks. Shares of Kesko are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives) but show below-average growth (Growth Rank of 13), and are riskily financed (Safety Rank of 49), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on Kesko's financial characteristics. As the company Kesko's key financial metrics exhibit good value (Obermatt Value Rank of 51) but low growth (Obermatt Growth Rank of 13) and risky financing practices (Obermatt Safety Rank of 49), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 51% of comparable companies, may indicate 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. ...read more
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