November 21, 2024
Top 10 Stock AVI Strong 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: AVI – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
AVI is listed as a top 10 stock on November 21, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 79 (top 79% performer), Obermatt assesses an overall strong buy recommendation for AVI on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Packaged Foods & Meats |
| Index | Independent Boards Growth Markets, JSE All Shares |
| Size class | 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 AVI Strong Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 67 |
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| SENTIMENT | ||||||||
| SENTIMENT | 88 |
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| 360° VIEW | ||||||||
| 360° VIEW | 79 |
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ANALYSIS: With an Obermatt 360° View of 79 (better than 79% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock AVI are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for AVI. The consolidated Growth Rank has a good rank of 57, 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. This means that growth is higher than for 57% of competitors in the same industry. The consolidated Safety Rank at 67 means that the company has a financing structure that is safer than 67% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, 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 Value Rank is less desirable at 41, meaning that the share price of AVI is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 59% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 79, AVI is better positioned than 79% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 57), a safe financing structure (Safety Rank of 67), and positive professional market sentiment (Sentiment Rank of 88), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of AVI compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (57% better than peers). The value rank could be the reverse reflection of that (43%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for AVI 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 AVI is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for AVI. Analyst Opinions are at a rank of 71 (better than 71% 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 63, 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 AVI. The Professional Investors rank is 82, which means that currently, professional investors hold more stock in this company than in 82% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 67 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 67% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 88 (more positive than 88% compared with investment alternatives), AVI 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 AVI 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: AVI Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), AVI shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for AVI. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 87% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning AVI's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 47 which means that the stock price compared with what market professionals expect for future profit levels is higher than 53% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 16 is also low. Compared with invested capital, the stock price is higher than for 84% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on AVI's stock price compared with the company's operational size and dividend yields. Should dividend investors pick AVI? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose AVI only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: AVI Growth Momentum good
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 58 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 37 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 34 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 93 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 57 |
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ANALYSIS: With an Obermatt Growth Rank of 57 (better than 57% compared with alternatives), AVI 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 half of the indicators below and half above average for AVI. Sales Growth has a rank of 58 which means that currently professionals expect the company to grow more than 58% of its competitors. Stock Returns are also above average with a rank of 93. But Capital Growth has only a rank of 34, which means that currently professionals expect the company to grow its invested capital less than 66% of its competitors. Profit Growth is also low, with a rank of only 37, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 57, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 93% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: AVI Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 64 |
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| REFINANCING | ||||||||
| REFINANCING | 40 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 81 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 67 |
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ANALYSIS: With an Obermatt Safety Rank of 67 (better than 67% compared with alternatives), the company AVI has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of AVI is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for AVI. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 40, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 67 (better than 67% compared with alternatives), AVI has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for AVI. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: AVI Above-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 41 |
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| GROWTH | ||||||||
| GROWTH | 57 |
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| SAFETY | ||||||||
| SAFETY | 81 |
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| COMBINED | ||||||||
| COMBINED | 61 |
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ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), AVI (Packaged Foods & Meats, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of AVI are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives). But they show above-average growth (Growth Rank of 57) and are safely financed (Safety Rank of 67, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on AVI's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company AVI exhibits low value (Obermatt Value Rank of 41), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 57). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 67) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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