November 21, 2024
Top 10 Stock Bid 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: Bid – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Bid 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. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 83 (top 83% performer), Obermatt assesses an overall strong buy recommendation for Bid on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Food Distributors |
| Index | Good Governace Growth Markets, Independent Boards Growth Markets, JSE All Shares |
| 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 Bid Strong Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| SENTIMENT | ||||||||
| SENTIMENT | 87 |
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| 360° VIEW | ||||||||
| 360° VIEW | 83 |
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ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Bid are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Bid. The consolidated Value Rank has an attractive rank of 65, which means that the share price of Bid is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 65% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 70. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 87. But the consolidated Growth Rank has a low rank of 33, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 67 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 83, Bid is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 65), secure financing practices (Safety Rank of 70), and positive market sentiment in the professional investor community (Sentiment Rank of 87). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 33), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Bid is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Bid very positive
ANALYSIS: With an Obermatt Sentiment Rank of 87 (better than 87% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Bid is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Bid. Analyst Opinions are at a rank of 31 (worse than 69% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 69, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Bid. Even better, the Professional Investors rank is 93, meaning that professional investors hold more stock in this company than in 93% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 82, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 82% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 87 (more positive than 87% compared with investment alternatives), Bid has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Bid Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 65 (better than 65% compared with alternatives), Bid 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 Bid. Price-to-Sales (P/S) is 87, which means that the stock price compared with what market professionals expect for future sales is lower than for 87% of comparable companies, indicating a good value concerning Bid's revenue size. The same is valid for dividend yields with a Dividend Yield rank of 63, which means that dividends are expected to be higher than for 63% 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 62% of alternatives (only 38% 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 64% 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 65, is a buy recommendation based on Bid'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: Bid Growth Momentum low
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 20 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 45 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 39 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 69 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 33 |
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ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Bid 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 three out of four indicators below average for Bid. Sales Growth has a below market rank of 20, which means that, currently, professionals expect the company to grow less than 80% of its competitors. The same is valid for Capital Growth, with a rank of 39, and Profit Growth, with a rank of 45. Currently, professionals expect the company to grow its profits less than 55% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 69, which means that the stock returns have recently been above 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Bid, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Bid Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 78 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 70 |
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ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Bid 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 Bid 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 Bid. Leverage is at a rank of 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Liquidity is also good at a rank of 78, meaning the company generates more profit to service its debt than 78% 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 47, 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 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Bid 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 Bid. 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: Bid Above-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 65 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% compared with investment alternatives), Bid (Food Distributors, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Bid are a good value (attractively priced) with a consolidated Value Rank of 65 (better than 65% of alternatives), are safely financed (Safety Rank of 70, which means low debt burdens), but show below-average growth (Growth Rank of 33). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Bid's financial characteristics. As the company Bid's key financial metrics exhibit good value (Obermatt Value Rank of 65) but low growth (Obermatt Growth Rank of 33) while being safely financed (Obermatt Safety Rank of 70), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 65% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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