October 3, 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 Telecommunications
SK Telecom is listed as a top 10 stock on October 03, 2024 in the market index Telecommunications 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 67 (high 67% performer), Obermatt assesses an overall buy recommendation for SK Telecom on October 03, 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 | October 3, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 67 |
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ANALYSIS: With an Obermatt 360° View of 67 (better than 67% 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 61, 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 61% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 92, which means that professional investors are more optimistic about the stock than for 92% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 43, 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 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. ...read more
RECOMMENDATION: With a consolidated 360° View of 67, SK Telecom is better positioned 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 61) and positive market sentiment in the professional investor community (Sentiment Rank of 92), but growth expectations are below-average (Growth Rank of 43) and the financing structure is on the risky side(Safety Rank of 36). 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 92 (better than 92% 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 89 (better than 89% 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 65, 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 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 74 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 74% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% 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 61 (better than 61% 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, where half the indicators are below and half above average for SK Telecom. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value concerning SK Telecom's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 92, which means that dividends are expected to be higher than for 92% of comparable investments. On the other hand, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is less favorable than for 59% of alternatives (only 41% of peers have an even higher ratio). The same is valid for the Price-to-Profit (or Price / Earnings, P/E) ratio, which is higher than for 51% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 61, is a buy recommendation based on SK Telecom's stock price compared with the company's operational size and dividend yields. This is a somewhat surprising picture, because it means that profits are low while dividends are high. One interpretation could be that profits are expected to increase, justifying the high dividend payments. But it could also mean that the company desperately keeps the high dividends to avoid a collapsing share price. This would be a rather dangerous constellation. ...read more
Growth Strategy: SK Telecom Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% 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 half of the indicators below and half above average for SK Telecom. Profit Growth has a rank of 56, which means that currently professionals expect the company to grow its profits more than 56% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 55 (above 55% of alternative investments). But Sales Growth has a below the median rank of 30, which means that, currently, professionals expect the company to grow less than 70% of its competitors, and Capital Growth also has a lower rank of 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for SK Telecom. ...read more
Safety Strategy: SK Telecom Debt Financing Safety below-average
| SAFETY METRICS | October 3, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 39 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
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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 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 46, meaning the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. Finally, Refinancing is at a rank of 39 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 36 (worse than 64% 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 | October 3, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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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), 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 61 (better than 61% of alternatives) but show below-average growth (Growth Rank of 43), and are riskily financed (Safety Rank of 36), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 40, 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 61) but low growth (Obermatt Growth Rank of 43) 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 61% 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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