October 17, 2024
Top 10 Stock KGHM Polska 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: KGHM Polska – Top 10 Stock in Rare Earth Mining and Production
KGHM Polska is listed as a top 10 stock on October 17, 2024 in the market index Rare Earth because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for KGHM Polska on October 17, 2024.
Snapshot: Obermatt Ranks
| Country | Poland |
| Industry | Copper |
| Index | Low Emissions, Copper, Energy Efficient, Iron, Lithium, Rare Earth, Uranium, WIG 20 |
| Size class | X-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 KGHM Polska Hold
| 360 METRICS | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 16 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 45 |
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ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock KGHM Polska are below the industry average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for KGHM Polska. The consolidated Growth Rank has a good rank of 74, 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. This means that growth is higher than for 74% of competitors in the same industry. The consolidated Safety Rank at 61 means that the company has a financing structure that is safer than 61% 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 good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 16, meaning that the share price of KGHM Polska is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 84% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, KGHM Polska is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 74), a safe financing structure (Safety Rank of 61), and positive professional market sentiment (Sentiment Rank of 54), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of KGHM Polska compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (74% better than peers). The value rank could be the reverse reflection of that (26%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for KGHM Polska positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock KGHM Polska is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for KGHM Polska. Analyst Opinions are at a rank of 15 (worse than 85% 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 24, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 100, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 100% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to KGHM Polska and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), KGHM Polska has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: KGHM Polska Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), KGHM Polska shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for KGHM Polska. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 22 which means the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning KGHM Polska's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53 and for the dividend yields rank which is lower than for 78% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on KGHM Polska's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for KGHM Polska, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: KGHM Polska Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 74 (better than 74% compared with alternatives), KGHM Polska 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, with half of the indicators below and half above average for KGHM Polska. Profit Growth has a rank of 98, which means that currently professionals expect the company to grow its profits more than 98% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 90 (above 90% of alternative investments). But Sales Growth has a below the median rank of 47, which means that, currently, professionals expect the company to grow less than 53% of its competitors, and Capital Growth also has a lower rank of 32. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 74, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for KGHM Polska. ...read more
Safety Strategy: KGHM Polska Debt Financing Safety above-average
| SAFETY METRICS | October 17, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 69 |
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| REFINANCING | ||||||||
| REFINANCING | 14 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 90 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 61 |
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ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company KGHM Polska 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 KGHM Polska 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 two out of three indicators above average for KGHM Polska. Leverage is at a rank of 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors. Liquidity is also good at a rank of 90, meaning the company generates more profit to service its debt than 90% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 14, 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 86% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), KGHM Polska has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for KGHM Polska. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: KGHM Polska Below-Average Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 16 |
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| GROWTH | ||||||||
| GROWTH | 74 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), KGHM Polska (Copper, Poland) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of KGHM Polska are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives). But they show above-average growth (Growth Rank of 74) and are safely financed (Safety Rank of 61, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on KGHM Polska's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company KGHM Polska exhibits low value (Obermatt Value Rank of 16), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 74). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 61) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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