August 22, 2024
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 Tokyo Stock Exchange TOPIX 100
Komatsu is listed as a top 10 stock on August 22, 2024 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 36 (36% performer), Obermatt assesses an overall hold recommendation for Komatsu on August 22, 2024.
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 | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| SENTIMENT | ||||||||
| SENTIMENT | 49 |
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| 360° VIEW | ||||||||
| 360° VIEW | 36 |
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ANALYSIS: With an Obermatt 360° View of 36 (better than 36% 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 three out of four indicators below average for Komatsu. Only the consolidated Value Rank has an attractive rank of 65, 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 65% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 25, 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. The consolidated Safety Rank has a riskier rank of 36, meaning the company has a riskier financing structure than 64% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 51% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 49. ...read more
RECOMMENDATION: With a consolidated 360° View of 36, Komatsu is worse than 64% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 65. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 25), a riskier financing structure than the competition (Safety Rank of 36), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 49) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of Komatsu is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Komatsu. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Komatsu only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock Komatsu is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Komatsu. Analyst Opinions are at a rank of 24 (worse than 76% 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 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Komatsu. More encouragingly, the Professional Investors rank is 80, which means that professional investors hold more stock in this company than in 80% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 35, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 65% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), Komatsu has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Komatsu. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Komatsu Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% 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 52 which means that the stock price compared with what market professionals expect for future sales is lower than for 52% 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 84% 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 50. Compared with other companies in the same industry, dividend yields of Komatsu are expected to be higher than for 90% of all competitors (a Dividend Yield rank of 90). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 65, 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 low
ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Komatsu 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 Komatsu. Sales Growth has a below market rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors. The same is valid for Capital Growth, with a rank of 30, and Profit Growth, with a rank of 24. Currently, professionals expect the company to grow its profits less than 76% 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 25, is a hold 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 | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 36 |
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ANALYSIS: With an Obermatt Safety Rank of 36 (better than 36% 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 65, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 65% 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 a consolidated Safety Rank of 36 (worse than 64% 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 Lowest Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 29 |
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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), Komatsu (Heavy Machinery, Japan) shares have lower financial characteristics compared with similar stocks. Shares of Komatsu are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives) but show below-average growth (Growth Rank of 25), and are riskily financed (Safety Rank of 36), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 22, is a sell recommendation based on Komatsu's financial characteristics. As the company Komatsu's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 25) and risky financing practices (Obermatt Safety Rank of 36), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 65% 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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