July 13, 2023
Top 10 Stock KT Strong 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: KT – Top 10 Stock in Telecommunications
KT is listed as a top 10 stock on July 13, 2023 in the market index Telecommunications because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 90 (top 90% performer), Obermatt assesses an overall strong buy recommendation for KT on July 13, 2023.
Snapshot: Obermatt Ranks
| Country | South Korea |
| Industry | Integrated Telecommunication |
| Index | Energy Efficient, Human Rights, Telecommunications, KOSPI |
| 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 KT Strong Buy
| 360 METRICS | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| SENTIMENT | ||||||||
| SENTIMENT | 69 |
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| 360° VIEW | ||||||||
| 360° VIEW | 90 |
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ANALYSIS: With an Obermatt 360° View of 90 (better than 90% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock KT are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for KT. The consolidated Value Rank has an attractive rank of 99, which means that the share price of KT is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 99% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 74. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 69. But the consolidated Growth Rank has a low rank of 13, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 87 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 90, KT is better positioned than 90% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 99), secure financing practices (Safety Rank of 74), and positive market sentiment in the professional investor community (Sentiment Rank of 69). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 13), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of KT is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for KT positive
ANALYSIS: With an Obermatt Sentiment Rank of 69 (better than 69% compared with alternatives), overall professional sentiment and engagement for the stock KT is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for KT. Analyst Opinions are at a rank of 88 (better than 88% 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 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 84, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 84% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 11, which means that currently, professional investors hold less stock in this company than in 89% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 69 (more positive than 69% compared with investment alternatives), KT has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in KT may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in KT. ...read more
Value Strategy: KT Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 99 (better than 99% compared with alternatives) for 2023, KT shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for KT. Price-to-Sales is 85 which means that the stock price compared with what market professionals expect for future sales is lower than for 85% of comparable companies, indicating a good value for KT's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 91% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 83. Compared with other companies in the same industry, dividend yields of KT are expected to be higher than for 95% of all competitors (a Dividend Yield rank of 95). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 99, is a buy recommendation based on KT's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in KT based on its detailed value metrics.
Growth Strategy: KT Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), KT 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 KT. Sales Growth has a rank of 43, which means that currently professionals expect the company to grow less than 57% of its competitors. The same is valid for Profit Growth, with a rank of 35, and Capital Growth with 49. In addition, Stock Returns have a below market rank of 15, which means that the stock returns have recently been below 85% 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: KT Debt Financing Safety above-average
| SAFETY METRICS | July 13, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 49 |
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| REFINANCING | ||||||||
| REFINANCING | 79 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 74 |
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ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company KT has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of KT is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for KT and the other two below average. Refinancing is at 79, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 79% of its competitors. But Leverage is high with a rank of 49, meaning the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. Liquidity is also on the riskier side with a rank of 46, meaning the company generates less profit to service its debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 74 (better than 74% compared with alternatives), KT has a financing structure that is safer 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 KT 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: KT Top Financial Performance
| COMBINED PERFORMANCE | July 13, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 99 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), KT (Integrated Telecommunication, South Korea) shares have much better financial characteristics than comparable stocks. Shares of KT are a good value (attractively priced) with a consolidated Value Rank of 99 (better than 99% of alternatives), are safely financed (Safety Rank of 74, which means low debt burdens), but show below-average growth (Growth Rank of 13). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on KT's financial characteristics. As the company KT's key financial metrics exhibit good value (Obermatt Value Rank of 99) but low growth (Obermatt Growth Rank of 13) while being safely financed (Obermatt Safety Rank of 74), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 99% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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