February 15, 2024
Top 10 Stock Knorr-Bremse Buy 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: Knorr-Bremse – Top 10 Stock in Deutscher Aktienindex Mid Cap MDAX
Knorr-Bremse is listed as a top 10 stock on February 15, 2024 in the market index MDAX because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 64 (high 64% performer), Obermatt assesses an overall buy recommendation for Knorr-Bremse on February 15, 2024.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Heavy Machinery |
| Index | CDAX, Human Rights, Renewables Users, MDAX |
| 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° View Knorr-Bremse Buy
| 360 METRICS | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 64 |
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ANALYSIS: With an Obermatt 360° View of 64 (better than 64% compared with alternatives), overall professional sentiment and financial characteristics for the stock Knorr-Bremse are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Knorr-Bremse. The consolidated Growth Rank has a good rank of 65, 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 65% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 22, which means that the share price of Knorr-Bremse 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 78% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 37, which means that the company has a financing structure that is riskier than those of 63% 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 64, Knorr-Bremse is better positioned than 64% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 65), and professional market sentiment is positive (Sentiment Rank of 90), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. 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 do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Knorr-Bremse very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Knorr-Bremse is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Knorr-Bremse. Analyst Opinions are at a rank of 44 (worse than 56% 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 78, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Knorr-Bremse. Even better, the Professional Investors rank is 82, meaning that professional investors hold more stock in this company than in 82% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 66, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Knorr-Bremse 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
Value Strategy: Knorr-Bremse Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 22 (worse than 78% compared with alternatives), Knorr-Bremse shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Knorr-Bremse. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 55% 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 31 which means that the stock price compared with what market professionals expect for future profits is higher than 69% of comparable companies, indicating a low value concerning Knorr-Bremse's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 47 which means that the stock price compared with what market professionals expect for future profit levels is higher than 53% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 20 is also low. Compared with invested capital, the stock price is higher than for 80% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 22, is a sell recommendation based on Knorr-Bremse's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Knorr-Bremse? 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 Knorr-Bremse only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Knorr-Bremse Growth Momentum good
| GROWTH METRICS | February 15, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 38 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 59 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 70 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 47 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 65 |
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ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Knorr-Bremse 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, where half of the indicators are below and half above average for Knorr-Bremse. Profit Growth, with a rank of 59 (better than 59% of its competitors), and Capital Growth, with a rank of 70, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 38, which means that, currently, professionals expect the company to grow less than 62% of its competitors, and Stock Returns are at a rank of 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Knorr-Bremse Debt Financing Safety below-average
| SAFETY METRICS | February 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 52 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 51 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Knorr-Bremse 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 Knorr-Bremse 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 Knorr-Bremse. Refinancing is at 52, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. Liquidity is also good at 51, meaning the company generates more profit to service its debt than 51% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 20, which means the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Knorr-Bremse has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Knorr-Bremse could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Knorr-Bremse Below-Average Financial Performance
| COMBINED PERFORMANCE | February 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 22 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| COMBINED | ||||||||
| COMBINED | 31 |
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ANALYSIS: With an Obermatt Combined Rank of 31 (worse than 69% compared with investment alternatives), Knorr-Bremse (Heavy Machinery, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Knorr-Bremse are low in value (priced high) with a consolidated Value Rank of 22 (worse than 78% of alternatives), and are riskily financed (Safety Rank of 37, which means above-average debt burdens) but show above-average growth (Growth Rank of 65). ...read more
RECOMMENDATION: A Combined Rank of 31, is a hold recommendation based on Knorr-Bremse's financial characteristics. As the company Knorr-Bremse shows low value with an Obermatt Value Rank of 22 (78% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 65% of comparable companies (Obermatt Growth Rank is 65). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 37 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Knorr-Bremse, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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