November 16, 2023
Top 10 Stock Komatsu Hold 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: Komatsu – Top 10 Stock in SDG 11: Sustainable Cities and Communities
Komatsu is listed as a top 10 stock on November 16, 2023 in the market index SDG 11 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 46 (46% performer), Obermatt assesses an overall hold recommendation for Komatsu on November 16, 2023.
Snapshot: Obermatt Ranks
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 Komatsu Hold
| 360 METRICS | November 16, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| SENTIMENT | ||||||||
| SENTIMENT | 72 |
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| 360° VIEW | ||||||||
| 360° VIEW | 46 |
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ANALYSIS: With an Obermatt 360° View of 46 (better than 46% compared with alternatives), overall professional sentiment and financial characteristics for the stock Komatsu are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Komatsu. The consolidated Value Rank has an attractive rank of 67, which means that the share price of Komatsu 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 67% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 72, which means that professional investors are more optimistic about the stock than for 72% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 15, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 46, meaning the company has a riskier financing structure than 54 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 46, Komatsu is worse than 54% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 67) and positive market sentiment in the professional investor community (Sentiment Rank of 72), but growth expectations are below-average (Growth Rank of 15) and the financing structure is on the risky side(Safety Rank of 46). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive 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. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Komatsu is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Komatsu positive
ANALYSIS: With an Obermatt Sentiment Rank of 72 (better than 72% compared with alternatives), overall professional sentiment and engagement for the stock Komatsu is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Komatsu. Analyst Opinions are at a rank of 52 (better than 52% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 57, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Komatsu. Finally, the Professional Investors rank is 95, which means that currently, professional investors hold more stock in this company than in 95% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 72 (more positive than 72% compared with investment alternatives), Komatsu has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 25, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 75% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Komatsu is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Komatsu Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 67 (better than 67% compared with alternatives), Komatsu 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 above average for Komatsu. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Komatsu's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 86% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 98 (dividends are expected to be higher than 98% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 59% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Komatsu to 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a buy recommendation based on Komatsu's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Komatsu Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), Komatsu 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 Komatsu. Profit Growth has a rank of 56, which means that currently professionals expect the company to grow its profits more than 56% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has a below the median rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Capital Growth also has a lower rank of 8. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Komatsu. ...read more
Safety Strategy: Komatsu Debt Financing Safety below-average
| SAFETY METRICS | November 16, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 31 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company Komatsu 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 Komatsu 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 just one indicator above average for Komatsu and the other two below average. Refinancing is at 69, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 31, meaning the company generates less profit to service its debt than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Komatsu has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Komatsu are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Komatsu Below-Average Financial Performance
| COMBINED PERFORMANCE | November 16, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 67 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| COMBINED | ||||||||
| COMBINED | 36 |
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ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), Komatsu (Heavy Machinery, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Komatsu are a good value (attractively priced) with a consolidated Value Rank of 67 (better than 67% of alternatives) but show below-average growth (Growth Rank of 15), and are riskily financed (Safety Rank of 46), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on Komatsu's financial characteristics. As the company Komatsu's key financial metrics exhibit good value (Obermatt Value Rank of 67) but low growth (Obermatt Growth Rank of 15) and risky financing practices (Obermatt Safety Rank of 46), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 67% 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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