December 7, 2023
Top 10 Stock Telkom 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: Telkom – Top 10 Stock in Independent Boards in Growth Markets
Telkom is listed as a top 10 stock on December 07, 2023 in the market index Independent Boards Growth Markets because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 39 (39% performer), Obermatt assesses an overall hold recommendation for Telkom on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Integrated Telecommunication |
| Index | Artificial Intelligence, Independent Boards Growth Markets, SDG 12, SDG 4, SDG 8, SDG 9, JSE All Shares |
| Size class | 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 Telkom Hold
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| SENTIMENT | ||||||||
| SENTIMENT | 1 |
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| 360° VIEW | ||||||||
| 360° VIEW | 39 |
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ANALYSIS: With an Obermatt 360° View of 39 (better than 39% compared with alternatives), overall professional sentiment and financial characteristics for the stock Telkom 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 Telkom. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Telkom is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 94% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 51, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 1. Professional investors are more confident in 99% other stocks. Worryingly, the company has risky financing, with a Safety rank of 39. This means 61% of comparable companies have a safer financing structure than Telkom. ...read more
RECOMMENDATION: With a consolidated 360° View of 39, Telkom is worse than 61% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 94 and the Growth Rank above-average at 51, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 1. In addition, the company financing structure is on the riskier side (Safety Rank of 39). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Telkom negative
ANALYSIS: With an Obermatt Sentiment Rank of 1 (better than 1% compared with alternatives), overall professional sentiment and engagement for the stock Telkom is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Telkom. Analyst Opinions are at a rank of 12 (worse than 88% 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 50, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Telkom. But the Professional Investors rank is low at 29, which means that professional investors hold less stock in this company than in 71% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 7, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 1 (less encouraging than 99% compared with investment alternatives), Telkom has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Telkom Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2023, Telkom shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Telkom. Price-to-Sales (P/S) is 97, which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value regarding Telkom's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 95% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 92. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 23% of all competitors have even lower dividend yields than Telkom (a Dividend Yield Rank of 23). 77% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Telkom's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Telkom Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Telkom 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 Telkom. Profit Growth, with a rank of 84 (better than 84% of its competitors), and Capital Growth, with a rank of 75, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 15, which means that, currently, professionals expect the company to grow less than 85% of its competitors, and Stock Returns are at a rank of 21. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, 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: Telkom Debt Financing Safety below-average
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 16 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 39 |
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ANALYSIS: With an Obermatt Safety Rank of 39 (better than 39% compared with alternatives), the company Telkom 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 Telkom 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 Telkom and the other two below average. Leverage is at a rank of 62 meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors.Refinancing is at a rank of 39, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 61% of its competitors. Liquidity is at a rank of 16, meaning that the company generates less profit to service its debt than 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 39 (worse than 61% compared with alternatives), Telkom has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Telkom are on the safer side. ...read more
Combined financial peformance: Telkom Above-Average Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Telkom (Integrated Telecommunication, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Telkom are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives), show above-average growth (Growth Rank of 51) but are riskily financed (Safety Rank of 39), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Telkom's financial characteristics. As the company Telkom's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 94) and above-average growth (Obermatt Growth Rank of 51), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 39) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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