June 29, 2023
Top 10 Stock Komatsu 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: Komatsu – Top 10 Stock in SDG 17: Partnerships to achieve the Goal
Komatsu is listed as a top 10 stock on June 29, 2023 in the market index SDG 17 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 33 (33% performer), Obermatt assesses an overall hold recommendation for Komatsu on June 29, 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° View Komatsu Hold
| 360 METRICS | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| SENTIMENT | ||||||||
| SENTIMENT | 64 |
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| 360° VIEW | ||||||||
| 360° VIEW | 33 |
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ANALYSIS: With an Obermatt 360° View of 33 (better than 33% compared with alternatives), overall professional sentiment and financial characteristics for the stock Komatsu are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Komatsu. The consolidated Value Rank has an attractive rank of 69, which means that the share price of Komatsu 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 69% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 64, which means that professional investors are more optimistic about the stock than for 64% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 11, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 45, meaning the company has a riskier financing structure than 55 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 33, Komatsu is worse than 67% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 69) and positive market sentiment in the professional investor community (Sentiment Rank of 64), but growth expectations are below-average (Growth Rank of 11) and the financing structure is on the risky side(Safety Rank of 45). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive 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. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Komatsu is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Komatsu positive
ANALYSIS: With an Obermatt Sentiment Rank of 64 (better than 64% 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 62 (better than 62% 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 94, 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 54, which means that currently, professional investors hold more stock in this company than in 54% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 64 (more positive than 64% 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 20, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 80% 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 better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Komatsu shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Komatsu. Price-to-Sales is 53 which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value for Komatsu's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 78% 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 52. Compared with other companies in the same industry, dividend yields of Komatsu are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on Komatsu'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 Komatsu based on its detailed value metrics.
Growth Strategy: Komatsu Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 11 (better than 11% 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 three out of four indicators below average for Komatsu. Sales Growth has a below market rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors. The same is valid for Capital Growth, with a rank of 33, and Profit Growth, with a rank of 43. Currently, professionals expect the company to grow its profits less than 57% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 59, which means that the stock returns have recently been above 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 11, 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 Komatsu, 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: Komatsu Debt Financing Safety below-average
| SAFETY METRICS | June 29, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 37 |
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| REFINANCING | ||||||||
| REFINANCING | 63 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 28 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 45 |
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ANALYSIS: With an Obermatt Safety Rank of 45 (better than 45% compared with alternatives), the company Komatsu 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 Komatsu 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 Komatsu and the other two below average. Refinancing is at 63, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 63% of its competitors. But Leverage is high with a rank of 37, meaning the company has an above-average debt-to-equity ratio. It has more debt than 63% of its competitors. Liquidity is also on the riskier side with a rank of 28, meaning the company generates less profit to service its debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 45 (worse than 55% compared with alternatives), Komatsu has a financing structure that is riskier 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 an investment decision. ...read more
Combined financial peformance: Komatsu Below-Average Financial Performance
| COMBINED PERFORMANCE | June 29, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 28 |
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| COMBINED | ||||||||
| COMBINED | 28 |
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ANALYSIS: With an Obermatt Combined Rank of 28 (worse than 72% 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 Value Rank of 69 (better than 69% of alternatives) but show below-average growth (Growth Rank of 11), and are riskily financed (Safety Rank of 45), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 28, 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 69) but low growth (Obermatt Growth Rank of 11) and risky financing practices (Obermatt Safety Rank of 45), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 69% 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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