September 7, 2023
Top 10 Stock mBank 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: mBank – Top 10 Stock in Warszawski Warsaw Indeks Giełdowy WIG 20
mBank is listed as a top 10 stock on September 07, 2023 in the market index WIG 20 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for mBank on September 07, 2023.
Snapshot: Obermatt Ranks
| Country | Poland |
| Industry | Diversified Banks |
| Index | Renewables Users, WIG 20 |
| 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 mBank Hold
| 360 METRICS | September 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 90 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock mBank are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for mBank. The consolidated Growth Rank has a good rank of 90, 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 90% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 64 which means that the company has a financing structure that is safer than 64% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 8 which means that the share price of mBank is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 92% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 8, which means that professional investors are more pessimistic about the stock than for 92% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 28, mBank is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 90), and the company is safely financed (Safety Rank of 64). However, professional market sentiment is low(Sentiment Rank of 8). The negative market view on mBank may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of mBank compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for mBank negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock mBank is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for mBank. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 33, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in mBank. The Professional Investors rank is also low at 18, meaning that professional investors hold less stock in this company than in 82% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 3, which means that the current professional news and professional social networks are critical of this company (more negative news than for 97% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 8 (less encouraging than 92% compared with investment alternatives), mBank has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: mBank Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), mBank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for mBank. Price-to-Sales is 43 which means that the stock price compared with what market professionals expect for future profits is higher than 57% of comparable companies, indicating a low value concerning mBank's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 7, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of mBank. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 45 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on mBank's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for mBank? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as mBank? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. mBank may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: mBank Growth Momentum high
| GROWTH METRICS | September 7, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 78 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 96 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 13 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 97 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 90 |
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ANALYSIS: With an Obermatt Growth Rank of 90 (better than 90% compared with alternatives) for 2023, mBank shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for mBank. Sales Growth has a rank of 78 which means that currently, professionals expect the company to grow more than 78% of its competitors. Both Profit Growth, with a rank of 96, and Stock Returns, with a rank of 97, are also above average. But Capital Growth only has a rank of 13, which means that, currently, professionals expect the company to grow its invested capital less than 87% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 90, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: mBank Debt Financing Safety above-average
| SAFETY METRICS | September 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 66 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 40 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
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ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company mBank 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 mBank 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 where two out of three are above average for mBank.Leverage is at 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors.Refinancing is at a rank of 66, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 66% of its competitors. Liquidity is at 40, meaning that the company generates less profit to service its debt than 60% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), mBank has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: mBank Above-Average Financial Performance
| COMBINED PERFORMANCE | September 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 90 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| COMBINED | ||||||||
| COMBINED | 59 |
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ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), mBank (Diversified Banks, Poland) shares have above-average financial characteristics compared with similar stocks. Shares of mBank are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives). But they show above-average growth (Growth Rank of 90) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on mBank's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company mBank exhibits low value (Obermatt Value Rank of 8), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 90). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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