Value
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 8.5 |
| EV/EBITDA | 4.3 |
| Fwd P/E | 7.2 |
| PEG | 4.6 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 1.87
BKH · Why this verdict
Why Black Hills (BKH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Black Hills has strong momentum near its 52-week high, but the price is 4.6% above the analyst target, cash earnings quality is a red flag, short interest is 19% and the dividend is flagged as unsafe.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The price of $79.41 is 4.6% above the $75.75 analyst target, with a negative reward-to-risk of -0.31 and 14.9% downside to the stop. Upside pct | Analyst targets rise above $85 or the price reverts toward the target within 12 months. | →Stable |
| CounterAnalyst coverage is light and targets lag a stock at its 52-week high, so a strong report in 11 days could lift them. | ||
Earnings quality is a red flag, with free cash flow at -26% of net income, and the company has no competitive moat. Quality breakdown | Free cash flow turns positive relative to net income over the next four quarters. | →Stable |
| CounterA regulated utility's negative free cash flow reflects rate-base capital spending that earns a regulated return, and the Piotroski F-Score is a strong 7/9. | ||
Momentum is strong at 7.3/10 with rising on-balance volume above the 200-day average, but RSI of 84 is overbought, 0.6% from the 52-week high. Momentum breakdown | Price holds above its 200-day average and momentum stays above 5.5. | →Stable |
| CounterRSI of 84 and a Bollinger score of 1.6/10 point to an overextended stock that could mean-revert. | ||
Short interest is high at 19% and the put/call ratio is elevated at 1.60, which signals bearish positioning. Risk breakdown | Short interest falls below 12% and put/call ratio below 1.0 as the rally persists. | ↑Improving |
| CounterHigh short interest in a rising stock can fuel a squeeze, and put buying may be hedging by long holders. | ||
The high yield carries a yield trap warning, with dividend safety scoring only 3.0/10. Catalyst breakdown | Dividend safety score rises above 5/10 as free cash flow recovers. | ↑Improving |
| CounterEarnings growth scores 8.3/10 and utilities have regulated cash flows that usually support dividends. | ||
The price of $79.41 is 4.6% above the $75.75 analyst target, with a negative reward-to-risk of -0.31 and 14.9% downside to the stop.
→StableUpside pct
- Expectation
- Analyst targets rise above $85 or the price reverts toward the target within 12 months.
CounterAnalyst coverage is light and targets lag a stock at its 52-week high, so a strong report in 11 days could lift them.
Earnings quality is a red flag, with free cash flow at -26% of net income, and the company has no competitive moat.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive relative to net income over the next four quarters.
CounterA regulated utility's negative free cash flow reflects rate-base capital spending that earns a regulated return, and the Piotroski F-Score is a strong 7/9.
Momentum is strong at 7.3/10 with rising on-balance volume above the 200-day average, but RSI of 84 is overbought, 0.6% from the 52-week high.
→StableMomentum breakdown
- Expectation
- Price holds above its 200-day average and momentum stays above 5.5.
CounterRSI of 84 and a Bollinger score of 1.6/10 point to an overextended stock that could mean-revert.
Short interest is high at 19% and the put/call ratio is elevated at 1.60, which signals bearish positioning.
↑ImprovingRisk breakdown
- Expectation
- Short interest falls below 12% and put/call ratio below 1.0 as the rally persists.
CounterHigh short interest in a rising stock can fuel a squeeze, and put buying may be hedging by long holders.
The high yield carries a yield trap warning, with dividend safety scoring only 3.0/10.
↑ImprovingCatalyst breakdown
- Expectation
- Dividend safety score rises above 5/10 as free cash flow recovers.
CounterEarnings growth scores 8.3/10 and utilities have regulated cash flows that usually support dividends.
Per-dimension breakdown
Quality
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.7 |
| ROA | 2.1 |
| Gross margin | 3.9 |
| Op margin | 8.6 |
| Net margin | 6.5 |
| Current ratio | 2.1 |
| FCF quality | 0.0 |
| Moat | 4.5 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -26% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.3 |
| EPS growth | 8.3 |
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.9 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 7.7 |
| Price target | 6.1 |
- ▸Light analyst coverage (7.0) — signal dampened
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.3 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.7 |
| quality rank | 3.6 |
| growth rank | 2.9 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 0.9 |
| 52w position | 9.7 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 0.0 |
| days to cover | 1.5 |
| volatility | 7.5 |
| put call | 10.0 |
| implied vol | 5.6 |
| beta | 9.0 |
| debt equity | 4.8 |
| news risk | 5.5 |
- ▸High short interest: 21%
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 9.9 |
| dividend safety | 3.0 |
| news activity | 8.0 |
- ▸Earnings in 6 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- 8K:CLEAN
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.4=NEGATIVE
- EARNINGS_PROXIMITY:6d<=7d
Warning (0)
none
Reward-to-Risk
-0.42
Upside
-6.2%
Downside
14.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.4=NEGATIVE, EARNINGS_PROXIMITY:6d<=7d) reinforce the read. Current asymmetry R:R is -0.42 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.1, Sentiment at 6.7, and Growth at 5.8; the weakest are Peer rank at 3.8, Technical at 4.1, and Quality at 4.2. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.42 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Price Above Analyst Target
Trip ifAnalyst target rises above $85 from the current $75.75.
- P2Weak Cash Earnings Quality
Trip ifFree cash flow exceeds 50% of net income from the current -26%.
- P3Overbought Strong Momentum
Trip ifMomentum score falls below 5.0 from the current 7.3.
- P4High Short Interest Bearish Options
Trip ifShort interest falls below 10% from the current 19%.
- P5Unsafe Dividend Yield
Trip ifDividend safety score rises above 5.0 from the current 3.0.