May 16, 2024
Top 10 Stock SK Telecom 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: SK Telecom – Top 10 Stock in Korea Composite Stock Price Index KOSPI
SK Telecom is listed as a top 10 stock on May 16, 2024 in the market index KOSPI 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 65 (high 65% performer), Obermatt assesses an overall buy recommendation for SK Telecom on May 16, 2024.
Snapshot: Obermatt Ranks
| Country | South Korea |
| Industry | Wireless Telecommunication |
| Index | Energy Efficient, Telecommunications, KOSPI |
| Size class | XX-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 SK Telecom Buy
| 360 METRICS | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 30 |
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| SENTIMENT | ||||||||
| SENTIMENT | 88 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock SK Telecom are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for SK Telecom. The consolidated Value Rank has an attractive rank of 73, which means that the share price of SK Telecom 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 73% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 88, which means that professional investors are more optimistic about the stock than for 88% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 39, 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 30, meaning the company has a riskier financing structure than 70 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 65, SK Telecom is better positioned than 65% 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 73) and positive market sentiment in the professional investor community (Sentiment Rank of 88), but growth expectations are below-average (Growth Rank of 39) and the financing structure is on the risky side(Safety Rank of 30). 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 SK Telecom 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 SK Telecom very positive
ANALYSIS: With an Obermatt Sentiment Rank of 88 (better than 88% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock SK Telecom is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for SK Telecom. Analyst Opinions are at a rank of 83 (better than 83% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 52, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in SK Telecom. The Professional Investors rank is 65, which means that currently, professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 81 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 81% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 88 (more positive than 88% compared with investment alternatives), SK Telecom has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean SK Telecom stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: SK Telecom Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), SK Telecom shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for SK Telecom. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value concerning SK Telecom's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 55% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 98 (dividends are expected to be higher than 98% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 56% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for SK Telecom to 44. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on SK Telecom's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: SK Telecom Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), SK Telecom 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 all but one indicator above average for SK Telecom. Profit Growth has a rank of 51 which means that currently professionals expect the company to grow its profits more than 51% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 51, and Stock Returns has a rank of 55 which means that the stock returns have recently been above 55% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 21 (79% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: SK Telecom Debt Financing Safety below-average
| SAFETY METRICS | May 16, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 44 |
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| REFINANCING | ||||||||
| REFINANCING | 35 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
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ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company SK Telecom 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 SK Telecom 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 all three metrics below average for SK Telecom. Liquidity is at 35, meaning that the company generates less profit to service its debt than 65% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 44, meaning the company has an above-average debt-to-equity ratio. It has more debt than 56% of its competitors. Finally, Refinancing is at a rank of 35 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 65% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 30 (worse than 70% compared with alternatives), SK Telecom has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: SK Telecom Below-Average Financial Performance
| COMBINED PERFORMANCE | May 16, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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| COMBINED | ||||||||
| COMBINED | 44 |
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ANALYSIS: With an Obermatt Combined Rank of 44 (worse than 56% compared with investment alternatives), SK Telecom (Wireless Telecommunication, South Korea) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SK Telecom are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives) but show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 30), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 44, is a hold recommendation based on SK Telecom's financial characteristics. As the company SK Telecom's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 39) and risky financing practices (Obermatt Safety Rank of 30), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 73% 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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