June 1, 2023
Top 10 Stock Komatsu Buy 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: Komatsu – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Komatsu is listed as a top 10 stock on June 01, 2023 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 54 (high 54% performer), Obermatt assesses an overall buy recommendation for Komatsu on June 01, 2023.
Snapshot: Obermatt Ranks
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° Assessment Komatsu Buy
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 75 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 72 |
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| 360° VIEW | ||||||||
| 360° VIEW | 54 |
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ANALYSIS: With an Obermatt 360° View of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock Komatsu are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Komatsu. The consolidated Value Rank has an attractive rank of 75, which means that the share price of Komatsu is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 75% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 51. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 72. But the consolidated Growth Rank has a low rank of 7, which means that the company is below average in terms of growth, and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 93 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 54, Komatsu is better than 54% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 75), secure financing practices (Safety Rank of 51), and positive market sentiment in the professional investor community (Sentiment Rank of 72). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company growth expectations are below the industry average (Growth Rank of 7), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good value ranking can sometimes indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Komatsu is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Komatsu positive
ANALYSIS: With an Obermatt Sentiment Rank of 72 (better than 72% compared with alternatives), overall professional sentiment and engagement for the stock Komatsu is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Komatsu. Analyst Opinions are at a rank of 65 (better than 65% 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 71, 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 Komatsu. Finally, the Professional Investors rank is 88, which means that currently, professional investors hold more stock in this company than in 88% of alternative investment opportunities. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 72 (more positive than 72% compared with investment alternatives), Komatsu has a reputation among professional investors that is above-average compared with 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 23, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 77% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Komatsu 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: Komatsu Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 75 (better than 75% compared with alternatives) for 2023, Komatsu shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Komatsu. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 81 which means that the stock price compared with what market professionals expect for future profits is lower than 81% of comparable companies, indicating a good value concerning Komatsu's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 53, and it's also true for Dividend Yield with an Dividend Yield Rank of 96. But, compared with other companies in the same industry, the stock price is higher than average if compared with expected revenues; only 51% of all competitors have an even higher stock price compared with sales revenues (a Price-to-Sales Rank of 49). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 75, is a strong buy recommendation based on Komatsu's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Komatsu has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Komatsu shares. ...read more
Growth Strategy: Komatsu Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 7 (better than 7% compared with alternatives), Komatsu 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 Komatsu. Sales Growth has a rank of 11, which means that currently professionals expect the company to grow less than 89% of its competitors. The same is valid for Profit Growth, with a rank of 29, and Capital Growth with 38. In addition, Stock Returns have a below market rank of 45, which means that the stock returns have recently been below 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 7, 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 prospects, especially Sentiment performance, because it may be a turnaround situation that could entail above-average returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Komatsu Debt Financing Safety above-average
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 66 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Komatsu 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 Komatsu 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 Komatsu and the other two below average. Refinancing is at 66, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 66% of its competitors. But Leverage is high with a rank of 36, meaning the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. Liquidity is also on the riskier side with a rank of 29, meaning the company generates less profit to service its debt than 71% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), Komatsu has a financing structure that is safer 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 Komatsu 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 a financial decision. ...read more
Combined financial peformance: Komatsu Below-Average Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 75 |
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| GROWTH | ||||||||
| GROWTH | 7 |
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| SAFETY | ||||||||
| SAFETY | 29 |
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| COMBINED | ||||||||
| COMBINED | 34 |
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ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Komatsu (Heavy Machinery, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Komatsu are a good value (attractively priced) with a consolidated Obermatt Value Rank of 75 (better than 75% of alternatives), are safely financed (Safety Rank of 51, which means low debt burdens), but show below-average growth (Growth Rank of 7). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 34, is a hold recommendation based on Komatsu's financial characteristics. As the company Komatsu's key financial metrics exhibit good value (Obermatt Value Rank of 75) but low growth (Obermatt Growth Rank of 7) while being safely financed (Obermatt Safety Rank of 51), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 75% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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