KB

Analyzing the Decline in KB Financial (KB) Stock Today

One of the standouts of today's afternoon trading session has been KB Financial, which logged a -4.7% drop and underperformed the S&P 500 by -6.0%. The Commercial Banking stock is now trading at $58.5 per share and is -24.7% below its average target price of $77.69. Analysts have set target prices ranging from $77.69 to 77.69 dollars per share, and have given the stock an average rating of buy.

The market seems to share this optimistic view, since KB Financial has a short interest of only 0.1% (this is the percentage of the share float that is being shorted). Each short position represents an investor's expectation that the price of the stock will decrease in the future.

Short selling involves borrowing shares and then selling them at current market prices. In the successful version of the strategy, the shares are purchased at a lower price at some time in the future. The investor then returns the shares to the lender, and keeps the profit made on the sell/buy transaction.

One measure of the market sentiment regarding a stock is its rate of institutional ownership, which in the case of KB Financial stands at 5.9%. This indicates a lower than average rate of institutional ownership -- but what does that have to do with sentiment regarding the stock?

The reason we look at institutional ownership is that institutions such as hedge funds, pension funds, and mutual funds have vast research capabilities. They are often close to management, speaking to them one-on-one and gaining an understanding of the opportunities and challenges they face. Thus, if an institution is willing to place their capital in a company, it's likely that their due diligence has shown it is a safe bet.

Overall, there is mixed market sentiment towards KB Financial because of an analyst consensus of strong upside potential, a buy rating, a very low short interest, and a very small number of institutional investors. Investors should not base their decisions on market sentiment only, they should also be aware of a stock's fundamentals before committing.

At a glance, here are some essential statistics you may want to know about KB:

  • It has trailing 12 month earnings per share (EPS) of $8.12 per share

  • KB Financial has a trailing 12 month Price to Earnings (P/E) ratio of 7.2 while the S&P 500 average is 28.21

  • The company has a Price to Book (P/B) ratio of 0.0 in contrast to the S&P 500's average ratio of 4.71

  • KB Financial is a Finance company, and the sector average P/E and P/B ratios are 19.48 and 1.85 respectively

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

IN FOCUS