July 25, 2024
Top 10 Stock State Bank of India Sell 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: State Bank of India – Top 10 Stock in Bombay Stock Exchange Sensitive Index BSE Sensex
State Bank of India is listed as a top 10 stock on July 25, 2024 in the market index BSE Sensex because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 21 (21% performer), Obermatt issues an overall sell recommendation for State Bank of India on July 25, 2024.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Diversified Banks |
| Index | BSE Sensex, CNX Nifty 50 |
| 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 State Bank of India Sell
| 360 METRICS | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 7 |
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| SENTIMENT | ||||||||
| SENTIMENT | 31 |
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| 360° VIEW | ||||||||
| 360° VIEW | 21 |
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ANALYSIS: With an Obermatt 360° View of 21 (better than 21% compared with alternatives), overall professional sentiment and financial characteristics for the stock State Bank of India are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for State Bank of India. The consolidated Growth Rank has a good rank of 71, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 71% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 43 means that the share price of State Bank of India is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 57% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 7, which means that the company has a riskier financing structure than 93% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 31, indicating professional investors are more pessimistic about the stock than for 69% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 21, State Bank of India is worse than 79% of all alternative stock investment opportunities based on the Obermatt Method. This means that State Bank of India shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 71), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 31), the company is rather risky when it comes to financing (Safety Rank of 7). The negative market view on State Bank of India may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of State Bank of India compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for State Bank of India only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 31 (better than 31% compared with alternatives), overall professional sentiment and engagement for the stock State Bank of India is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for State Bank of India. Analyst Opinions are at a rank of 69 (better than 69% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 49, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in State Bank of India. The Professional Investors rank is also low at 38, meaning that professional investors hold less stock in this company than in 62% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 14, which means that the current professional news and professional social networks are critical of this company (more negative news than for 86% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 31 (less encouraging than 69% compared with investment alternatives), State Bank of India has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: State Bank of India Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), State Bank of India shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for State Bank of India. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning State Bank of India's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 39, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of State Bank of India. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 44 and Dividend Yield, which is lower than 70% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on State Bank of India's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for State Bank of India? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as State Bank of India? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. State Bank of India may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: State Bank of India Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), State Bank of India shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for State Bank of India. Sales Growth has a rank of 67 which means that currently, professionals expect the company to grow more than 67% of its competitors. Capital Growth is also above 28% of competitors with a rank of 87, and Stock Returns with the rank of 83 is also an outperformance. Only Profit Growth is low with a rank of 28 which means that currently, professionals expect the company to grow its profits less than 72% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, State Bank of India is a good growth stock. ...read more
Safety Strategy: State Bank of India Debt Financing Safety risky
| SAFETY METRICS | July 25, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 55 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 7 |
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ANALYSIS: With an Obermatt Safety Rank of 7 (better than 7% compared with alternatives), the company State Bank of India has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of State Bank of India 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 State Bank of India and the other two below average. Refinancing is at 55, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 55% of its competitors. But Leverage is high with a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Liquidity is also on the riskier side with a rank of 10, meaning the company generates less profit to service its debt than 90% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 7 (worse than 93% compared with alternatives), State Bank of India has a financing structure that is significantly 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 State Bank of India 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: State Bank of India Lowest Financial Performance
| COMBINED PERFORMANCE | July 25, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 43 |
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| GROWTH | ||||||||
| GROWTH | 71 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| COMBINED | ||||||||
| COMBINED | 21 |
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ANALYSIS: With an Obermatt Combined Rank of 21 (worse than 79% compared with investment alternatives), State Bank of India (Diversified Banks, India) shares have lower financial characteristics compared with similar stocks. Shares of State Bank of India are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives), and are riskily financed (Safety Rank of 7, which means above-average debt burdens) but show above-average growth (Growth Rank of 71). ...read more
RECOMMENDATION: A Combined Rank of 21, is a sell recommendation based on State Bank of India's financial characteristics. As the company State Bank of India shows low value with an Obermatt Value Rank of 43 (57% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 71% of comparable companies (Obermatt Growth Rank is 71). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 7 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for State Bank of India, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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