December 14, 2023
Top 10 Stock UMB Financial Sell Recommendation

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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 UMB Financial Sell

360 METRICS	December 14, 2023
VALUE
VALUE	26
GROWTH
GROWTH	30
SAFETY
SAFETY	7
SENTIMENT
SENTIMENT	65
360° VIEW
360° VIEW	10

ANALYSIS: With an Obermatt 360° View of 10 (better than 10% compared with alternatives), overall professional sentiment and financial characteristics for the stock UMB Financial are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for UMB Financial. The consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 26, which means that the share price of UMB Financial is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 30, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 30% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 7 which means that the company has a riskier financing structure than 93% 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 10, UMB Financial is worse than 90% of all alternative stock investment opportunities based on the Obermatt Method. This means that UMB Financial shares are on the riskier side for investors. As only the professional market sentiment (Sentiment Rank of 65) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of UMB Financiaḷ is bright. A small investment might be justified, but proceed with caution. ...read more

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Sentiment Strategy: Professional Market Sentiment for UMB Financial positive

SENTIMENT METRICS	December 14, 2023
ANALYST OPINION
ANALYST OPINION	91
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	34
MARKET PULSE
MARKET PULSE	52
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	65

ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock UMB Financial is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for UMB Financial. Analyst Opinions are at a rank of 91 (better than 91% 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 52, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 52% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 34, which means that currently, professional investors hold less stock in this company than in 66% of alternative investment opportunities. Pros tend to invest in other companies. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), UMB Financial has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in UMB Financial 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 UMB Financial. ...read more

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Value Strategy: UMB Financial Stock Price Value below-average critical

VALUE METRICS	December 14, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	58
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	46
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	28
DIVIDEND YIELD
DIVIDEND YIELD	16
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	26

ANALYSIS: With an Obermatt Value Rank of 26 (worse than 74% compared with alternatives), UMB Financial shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for UMB Financial. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than 58% of comparable companies, indicating a good value concerning to UMB Financial's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 16, meaning that dividends are expected to be lower than for 84% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 72% of alternatives (only 28% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 54% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 26, is a hold recommendation based on UMB Financial's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in UMB Financial could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, UMB Financial looks like an expensive investment today. ...read more

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Growth Strategy: UMB Financial Growth Momentum low

GROWTH METRICS	December 14, 2023
REVENUE GROWTH
REVENUE GROWTH	62
PROFIT GROWTH
PROFIT GROWTH	19
CAPITAL GROWTH
CAPITAL GROWTH	17
STOCK RETURNS
STOCK RETURNS	63
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	30

ANALYSIS: With an Obermatt Growth Rank of 30 (better than 30% compared with alternatives), UMB Financial shows a below-average growth dynamic in its industry. There is limited 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 UMB Financial. Sales Growth has a rank of 62 which means that currently professionals expect the company to grow more than 62% of its competitors. Stock Returns are also above average with a rank of 63. But Capital Growth has only a rank of 17, which means that currently professionals expect the company to grow its invested capital less than 83% of its competitors. Profit Growth is also low, with a rank of only 19, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 30, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 63% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more

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Safety Strategy: UMB Financial Debt Financing Safety risky

SAFETY METRICS	December 14, 2023
LEVERAGE
LEVERAGE	8
REFINANCING
REFINANCING	58
LIQUIDITY
LIQUIDITY	20
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	7

ANALYSIS: With an Obermatt Safety Rank of 7 (better than 7% compared with alternatives), the company UMB Financial has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of UMB Financial 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 UMB Financial and the other two below average. Refinancing is at 58, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. But Leverage is high with a rank of 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Liquidity is also on the riskier side with a rank of 20, meaning the company generates less profit to service its debt than 80% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 7 (worse than 93% compared with alternatives), UMB Financial has a financing structure that is significantly 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 UMB Financial 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

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Combined financial peformance: UMB Financial Lowest Financial Performance

COMBINED PERFORMANCE	December 14, 2023
VALUE
VALUE	26
GROWTH
GROWTH	30
SAFETY
SAFETY	20
COMBINED
COMBINED	4

ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), UMB Financial (Regional Banks, USA) shares have lower financial characteristics compared with similar stocks. Shares of UMB Financial are low in value (priced high) with a consolidated Value Rank of 26 (worse than 74% of alternatives), show below-average growth (Growth Rank of 30), and are riskily financed (Safety Rank of 7), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on UMB Financial's financial characteristics. As the company UMB Financial's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 26), low growth (Obermatt Growth Rank of 30), and risky financing practices (Obermatt Safety Rank of 7), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more

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