August 22, 2024
Top 10 Stock KBC Sell 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: KBC – Top 10 Stock in Belgian 20 Index BEL20
KBC is listed as a top 10 stock on August 22, 2024 in the market index BEL20 because of its high performance in at least one of the Obermatt investment strategies. All consolidated Obermatt Ranks are below-average. Based on the Obermatt Method, an investment in the company is not advisable today. Based on the Obermatt 360° View of 14 (14% performer), Obermatt issues an overall sell recommendation for KBC on August 22, 2024.
Snapshot: Obermatt Ranks
| Country | Belgium |
| Industry | Diversified Banks |
| Index | BEL20, Diversity Europe, Human Rights, Renewables Users, SDG 12, SDG 13, SDG 3, SDG 7, SDG 8 |
| 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 KBC Sell
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 40 |
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| SAFETY | ||||||||
| SAFETY | 30 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 14 |
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ANALYSIS: With an Obermatt 360° View of 14 (better than 14% compared with alternatives), overall professional sentiment and financial characteristics for the stock KBC are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with all four indicators below average for KBC. The consolidated Value Rank has a low rank of 40 which means that the share price of KBC is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 60% of alternative stocks in the same industry. The consolidated Growth Rank also has a low rank of 40, 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. This means that growth is lower than for 40% of competitors in the same industry. The consolidated Safety Rank has a riskier rank of 30, which means that the company has a riskier financing structure than 70% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a low rank of 35, which means that professional investors are more pessimistic about the stock than for 65% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 14, KBC is worse than 86% of all alternative stock investment opportunities based on the Obermatt Method. This means that KBC shares are on the riskier side for investors. As all consolidated Obermatt Ranks are below-average, this is a risky stock investment proposition, especially since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 35. The negative market view on KBC may stem from the high stock price (low value), the low level of growth, or the risky financing structures. That's several problems with no good news anywhere. Based on the current information, we don’t see any compelling arguments to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not confirmed by investor behavior today. While KBC may have a bright future, it is reflected in neither the financial indicators nor the market sentiment. ...read more
Sentiment Strategy: Professional Market Sentiment for KBC only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock KBC is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for KBC. Analyst Opinions are at a rank of 28 (worse than 72% 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 74 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in KBC. Market Pulse is also positive with a rank of 74, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 74% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 14, which means that professional investors hold less stock in this company than in 86% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), KBC has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: KBC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% compared with alternatives), KBC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for KBC. Price-to-Sales (P/S) is 55, which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value concerning KBC's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 50% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 48 (dividends are expected to be higher than for 48% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 70% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for KBC to 30. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 40, is a hold recommendation based on KBC's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: KBC Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 40 (better than 40% compared with alternatives), KBC 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 three out of four indicators below-average for KBC. While Sales Growth ranks at 80, professionals currently expect the company to grow more than 80% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 25, which means that, currently, professionals expect the company to grow its profits less than 75% of its competitors, and Capital Growth has a low rank of 49. Historic stock returns were also below average with a current Stock Returns rank of 40 which means that the stock returns have recently been below 60% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 40, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: KBC Debt Financing Safety below-average
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 68 |
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| REFINANCING | ||||||||
| REFINANCING | 28 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 41 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
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ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company KBC 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 KBC 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 KBC and the other two below average. Leverage is at a rank of 68 meaning the company has a below-average debt-to-equity ratio. It has less debt than 68% of its competitors.Refinancing is at a rank of 28, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 72% of its competitors. Liquidity is at a rank of 41, meaning that the company generates less profit to service its debt than 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 30 (worse than 70% compared with alternatives), KBC 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 KBC are on the safer side. ...read more
Combined financial peformance: KBC Lowest Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 40 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), KBC (Diversified Banks, Belgium) shares have lower financial characteristics compared with similar stocks. Shares of KBC are low in value (priced high) with a consolidated Value Rank of 40 (worse than 60% of alternatives), show below-average growth (Growth Rank of 40), and are riskily financed (Safety Rank of 30), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on KBC's financial characteristics. As the company KBC's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 40), low growth (Obermatt Growth Rank of 40), and risky financing practices (Obermatt Safety Rank of 30), 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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