September 19, 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 SDG 17: Partnerships to achieve the Goal
Komatsu is listed as a top 10 stock on September 19, 2024 in the market index SDG 17 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 48 (48% performer), Obermatt assesses an overall hold recommendation for Komatsu on September 19, 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 | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 40 |
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| SENTIMENT | ||||||||
| SENTIMENT | 49 |
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| 360° VIEW | ||||||||
| 360° VIEW | 48 |
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ANALYSIS: With an Obermatt 360° View of 48 (better than 48% 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 71, 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 71% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 35, 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 40, meaning the company has a riskier financing structure than 60% 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 48, Komatsu is worse than 52% 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 71. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 35), a riskier financing structure than the competition (Safety Rank of 40), 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 the indicators below and the other half above average for Komatsu. Analyst Opinions are at a rank of 30 (worse than 70% 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 42, 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 35, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 65% of competitors). On the upside, the Professional Investors rank is 65, which means that professional investors hold more stock in this company than in 65% 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 49 (less encouraging than 51% compared with investment alternatives), Komatsu 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 Komatsu 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: Komatsu Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% 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 88% 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 58. 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 71, 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
| GROWTH METRICS | September 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 19 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 29 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 98 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 25 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 35 |
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ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% 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. Only Capital Growth has a good rank of 98, which means that currently professionals expect the company to grow its invested capital more than 29% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 19 which means that currently professionals expect the company to grow less than 81% of its competitors. Profit Growth with a rank of 29 and Stock Returns with a rank of 25 are also low (below 75% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Komatsu is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Komatsu Debt Financing Safety below-average
| SAFETY METRICS | September 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 67 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 40 |
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ANALYSIS: With an Obermatt Safety Rank of 40 (better than 40% 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 67, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 67% 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 40 (worse than 60% 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 | September 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 71 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 29 |
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| COMBINED | ||||||||
| COMBINED | 40 |
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ANALYSIS: With an Obermatt Combined Rank of 40 (worse than 60% 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 71 (better than 71% of alternatives) but show below-average growth (Growth Rank of 35), and are riskily financed (Safety Rank of 40), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 40, 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 71) but low growth (Obermatt Growth Rank of 35) and risky financing practices (Obermatt Safety Rank of 40), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 71% 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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