September 12, 2024
Top 10 Stock B&M European Value Retail 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: B&M European Value Retail – Top 10 Stock in FTSE 100 Index
B&M European Value Retail is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 59 (high 59% performer), Obermatt assesses an overall buy recommendation for B&M European Value Retail on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | Luxembourg |
| Industry | General Merchandise Stores |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe |
| Size class | X-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 B&M European Value Retail Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| SENTIMENT | ||||||||
| SENTIMENT | 59 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° View of 59 (better than 59% compared with alternatives), overall professional sentiment and financial characteristics for the stock B&M European Value Retail are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for B&M European Value Retail. The consolidated Sentiment Rank has a good rank of 59, which means that professional investors are more optimistic about the stock than for 59% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 49, which means that the share price of B&M European Value Retail is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 44, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 44% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 48 which means that the company has a riskier financing structure than 52% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 59, B&M European Value Retail is better positioned than 59% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 59) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of B&M European Value Retaiḷ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for B&M European Value Retail positive
ANALYSIS: With an Obermatt Sentiment Rank of 59 (better than 59% compared with alternatives), overall professional sentiment and engagement for the stock B&M European Value Retail is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for B&M European Value Retail. Analyst Opinions are at a rank of 43 (worse than 57% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 37, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 63, which means that professional investors hold more stock in this company than in 63% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 82, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 82% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to B&M European Value Retail and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 59 (more positive than 59% compared with investment alternatives), B&M European Value Retail has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: B&M European Value Retail Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), B&M European Value Retail shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for B&M European Value Retail. Price-to-Profit (also referred to as price-earnings, P/E) is 61 which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning B&M European Value Retail's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 12, which means that the stock price is lower as regards to invested capital than for 12% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 13% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on B&M European Value Retail's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: B&M European Value Retail Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 66 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 36 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 52 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 23 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 44 |
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ANALYSIS: With an Obermatt Growth Rank of 44 (better than 44% compared with alternatives), B&M European Value Retail 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 half of the indicators below and half above average for B&M European Value Retail. Sales Growth has a rank of 66 which means that currently, professionals expect the company to grow more than 66% of its competitors. Capital Growth is also above 36% of competitors with a rank of 52. But Profit Growth only has a rank of 36, which means that currently professionals expect the company to grow its profits less than 64% of its competitors. And Stock Returns have also been below average with a rank of only 23. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 44, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: B&M European Value Retail Debt Financing Safety below-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 18 |
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| REFINANCING | ||||||||
| REFINANCING | 49 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
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ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company B&M European Value Retail has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of B&M European Value Retail 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 B&M European Value Retail. Liquidity is at 72, meaning the company generates more profit to service its debt than 72% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 49, 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 51% of its competitors. Leverage is also high at a rank of 18, which means that the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), B&M European Value Retail has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: B&M European Value Retail Below-Average Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 44 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| COMBINED | ||||||||
| COMBINED | 41 |
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ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), B&M European Value Retail (General Merchandise Stores, Luxembourg) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of B&M European Value Retail are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), show below-average growth (Growth Rank of 44), and are riskily financed (Safety Rank of 48), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on B&M European Value Retail's financial characteristics. As the company B&M European Value Retail's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 49), low growth (Obermatt Growth Rank of 44), and risky financing practices (Obermatt Safety Rank of 48), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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