November 7, 2024
Top 10 Stock Kesko 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: Kesko – Top 10 Stock in Optionsmäklarna Helsinki Stock Exchange Helsinki Index OMX 25
Kesko is listed as a top 10 stock on November 07, 2024 in the market index OMX 25 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 16 (16% performer), Obermatt issues an overall sell recommendation for Kesko on November 07, 2024.
Snapshot: Obermatt Ranks
| Country | Finland |
| Industry | Food Retail |
| Index | OMX 25, Dividends Europe, Employee Focus EU, Renewables Users |
| 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 Kesko Sell
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 16 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| SENTIMENT | ||||||||
| SENTIMENT | 25 |
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| 360° VIEW | ||||||||
| 360° VIEW | 16 |
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ANALYSIS: With an Obermatt 360° View of 16 (better than 16% compared with alternatives), overall professional sentiment and financial characteristics for the stock Kesko are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for Kesko. The only rank that is above average is the consolidated Safety Rank at 54, which means that the company has a financing structure that is safer than those of 54% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 43, which means that the share price of Kesko is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 16, which implies 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. Finally, the consolidated Sentiment Rank is also low at a rank of 25, which means that professional investors are more pessimistic about the stock than for 75% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 16, Kesko is worse than 84% of all alternative stock investment opportunities based on the Obermatt Method. This means that Kesko shares are on the riskier side for investors. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 25. The negative market view on Kesko may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today 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 visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Kesko only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock Kesko is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Kesko. Analyst Opinions are at a rank of 23 (worse than 77% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 18, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 32, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 68% of competitors). On the upside, the Professional Investors rank is 72, which means that professional investors hold more stock in this company than in 72% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), Kesko has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Kesko stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Kesko Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Kesko shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Kesko. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 76% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 38 which means that the stock price compared with what market professionals expect for future profits is higher than 62% of comparable companies, indicating a low value concerning Kesko's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 40 which means that the stock price compared with what market professionals expect for future profit levels is higher than 60% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 30 is also low. Compared with invested capital, the stock price is higher than for 70% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on Kesko's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Kesko? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Kesko only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Kesko Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 16 (better than 16% compared with alternatives), Kesko 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 three out of four indicators below average for Kesko. Sales Growth has a below market rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors. The same is valid for Capital Growth, with a rank of 8, and Profit Growth, with a rank of 25. Currently, professionals expect the company to grow its profits less than 75% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 57, which means that the stock returns have recently been above 57% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 16, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Kesko, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Kesko Debt Financing Safety above-average
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 36 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 67 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 54 |
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ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Kesko 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 Kesko 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, with just one indicator above average for Kesko. Liquidity is at 67, meaning the company generates more profit to service its debt than 67% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 36, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 64% of its competitors. Leverage is also high at a rank of 42, which means that the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Kesko has a financing structure that is safer than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Kesko Lowest Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 16 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| COMBINED | ||||||||
| COMBINED | 22 |
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ANALYSIS: With an Obermatt Combined Rank of 22 (worse than 78% compared with investment alternatives), Kesko (Food Retail, Finland) shares have lower financial characteristics compared with similar stocks. Shares of Kesko are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 16) but are safely financed (Safety Rank of 54), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 22, is a sell recommendation based on Kesko's financial characteristics. As the company Kesko's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 16), 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. In this case, good financing practices (Obermatt Safety Rank of 54) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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