June 22, 2023
Top 10 Stock Kyowa Hakko Kirin 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: Kyowa Hakko Kirin – Top 10 Stock in Nikkei 225 Index
Kyowa Hakko Kirin is listed as a top 10 stock on June 22, 2023 in the market index Nikkei 225 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 58 (high 58% performer), Obermatt assesses an overall buy recommendation for Kyowa Hakko Kirin on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Pharmaceuticals |
| Index | Nikkei 225 |
| 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 Kyowa Hakko Kirin Buy
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 67 |
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| 360° VIEW | ||||||||
| 360° VIEW | 58 |
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ANALYSIS: With an Obermatt 360° View of 58 (better than 58% compared with alternatives), overall professional sentiment and financial characteristics for the stock Kyowa Hakko Kirin are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Kyowa Hakko Kirin. The consolidated Sentiment Rank has a good rank of 67, which means that professional investors are more optimistic about the stock than for 67% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 96 or better than 96% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 43, meaning that the share price of Kyowa Hakko Kirin is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 17. ...read more
RECOMMENDATION: With a 360° View of 58, Kyowa Hakko Kirin is better positioned than 58% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 67) and safe financing practices (Safety Rank of 96), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Kyowa Hakko Kiriṇ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Kyowa Hakko Kirin positive
ANALYSIS: With an Obermatt Sentiment Rank of 67 (better than 67% compared with alternatives), overall professional sentiment and engagement for the stock Kyowa Hakko Kirin is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Kyowa Hakko Kirin. Analyst Opinions are at a rank of 57 (better than 57% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 59 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 59% of competitors). But Analyst Opinions Change has a below-average rank of 24, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Kyowa Hakko Kirin. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 67 (more positive than 67% compared with investment alternatives), Kyowa Hakko Kirin has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Kyowa Hakko Kirin Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), Kyowa Hakko Kirin shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Kyowa Hakko Kirin. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 51 which means that the stock price compared with what market professionals expect for future profits is lower than for 51% of comparable companies, indicating a good value concerning Kyowa Hakko Kirin'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 54, and for Dividend Yield with a Dividend Yield Rank of 59. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 67% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 33). 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 43, is a HOLD recommendation based on Kyowa Hakko Kirin'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 Kyowa Hakko Kirin 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 Kyowa Hakko Kirin shares. ...read more
Growth Strategy: Kyowa Hakko Kirin Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), Kyowa Hakko Kirin 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 metrics below average for Kyowa Hakko Kirin. While Profit Growth has a good rank of 60, as professionals currently expect the company to grow its profits more than 60% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 21, which means that currently professionals expect the company to grow less than 79% of its competitors, while Capital Growth has a rank of 23 and Stock Returns have been below market median, with a rank of 35 (65% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a SELL recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Kyowa Hakko Kirin Debt Financing Safety very solid
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 83 |
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| REFINANCING | ||||||||
| REFINANCING | 71 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company Kyowa Hakko Kirin has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Kyowa Hakko Kirin 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, where all three are above average for Kyowa Hakko Kirin. Leverage is at 83, meaning the company has a below-average debt-to-equity ratio. It has less debt than 83% of its competitors. Refinancing is at a rank of 71, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Finally, Liquidity is also good at a rank of 92, which means that the company generates more profit to service its debt than 92% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives), Kyowa Hakko Kirin has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Kyowa Hakko Kirin Above-Average Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 51 |
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ANALYSIS: With an Obermatt Combined Rank of 51 (better than 51% compared with investment alternatives), Kyowa Hakko Kirin (Pharmaceuticals, Japan) shares have above-average financial characteristics compared with similar stocks. Shares of Kyowa Hakko Kirin are low in value (priced high) with a consolidated Obermatt Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 17) but are safely financed (Safety Rank of 96), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 51, is a buy recommendation based on Kyowa Hakko Kirin's financial characteristics. As the company Kyowa Hakko Kirin's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 17), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 96) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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