April 11, 2024
Top 10 Stock KAP Industrial 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: KAP Industrial – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
KAP Industrial is listed as a top 10 stock on April 11, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 36 (36% performer), Obermatt assesses an overall hold recommendation for KAP Industrial on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Industrial Conglomerates |
| Index | Good Governace Growth Markets, Independent Boards Growth Markets, 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 KAP Industrial Hold
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 36 |
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ANALYSIS: With an Obermatt 360° View of 36 (better than 36% compared with alternatives), overall professional sentiment and financial characteristics for the stock KAP Industrial are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for KAP Industrial. Only the consolidated Value Rank has an attractive rank of 98, which means that the share price of KAP Industrial 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 98% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 1, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 48, meaning the company has a riskier financing structure than 52% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 65% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 35. ...read more
RECOMMENDATION: With a consolidated 360° View of 36, KAP Industrial is worse than 64% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 98. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 1), a riskier financing structure than the competition (Safety Rank of 48), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 35) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of KAP Industrial is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of KAP Industrial. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for KAP Industrial only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock KAP Industrial is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for KAP Industrial. Analyst Opinions are at a rank of 58 (better than 58% 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 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 KAP Industrial. Finally, the Professional Investors rank is 56, which means that currently, professional investors hold more stock in this company than in 56% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), KAP Industrial has a reputation among professional investors that is below 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 17, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 83% of competitors). This could mean future risks and should make investors careful. Attention to negative news for KAP Industrial 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: KAP Industrial Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 98 (better than 98% compared with alternatives) for 2024, KAP Industrial shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for KAP Industrial. Price-to-Sales is 88 which means that the stock price compared with what market professionals expect for future sales is lower than for 88% of comparable companies, indicating a good value for KAP Industrial's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 90% 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 93. Compared with other companies in the same industry, dividend yields of KAP Industrial are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 98, is a buy recommendation based on KAP Industrial'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 KAP Industrial based on its detailed value metrics.
Growth Strategy: KAP Industrial Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 1 (better than 1% compared with alternatives), KAP Industrial 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 KAP Industrial. Sales Growth has a rank of 7, which means that currently professionals expect the company to grow less than 93% of its competitors. The same is valid for Profit Growth, with a rank of 10, and Capital Growth with 17. In addition, Stock Returns have a below market rank of 21, which means that the stock returns have recently been below 79% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 1, 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: KAP Industrial Debt Financing Safety below-average
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 31 |
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| REFINANCING | ||||||||
| REFINANCING | 66 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 62 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
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ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company KAP Industrial 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 KAP Industrial 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 two out of three indicators above-average for KAP Industrial. Refinancing is at 66, meaning 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 also good at 62, meaning the company generates more profit to service its debt than 62% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 31, which means the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), KAP Industrial has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and KAP Industrial could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: KAP Industrial Below-Average Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 98 |
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| GROWTH | ||||||||
| GROWTH | 1 |
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| SAFETY | ||||||||
| SAFETY | 62 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), KAP Industrial (Industrial Conglomerates, South Africa) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of KAP Industrial are a good value (attractively priced) with a consolidated Value Rank of 98 (better than 98% of alternatives) but show below-average growth (Growth Rank of 1), and are riskily financed (Safety Rank of 48), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on KAP Industrial's financial characteristics. As the company KAP Industrial's key financial metrics exhibit good value (Obermatt Value Rank of 98) but low growth (Obermatt Growth Rank of 1) and risky financing practices (Obermatt Safety Rank of 48), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 98% 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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