November 21, 2024
Top 10 Stock Tapestry 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: Tapestry – Top 10 Stock in Diversity Leaders in United States
Tapestry is listed as a top 10 stock on November 21, 2024 in the market index Diversity USA because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 68 (high 68% performer), Obermatt assesses an overall buy recommendation for Tapestry on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Apparel, Accessories, Luxury |
| Index | Dividends USA, Diversity USA, S&P US Luxury, S&P 500 |
| 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 Tapestry Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 33 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 31 |
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| SENTIMENT | ||||||||
| SENTIMENT | 99 |
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| 360° VIEW | ||||||||
| 360° VIEW | 68 |
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ANALYSIS: With an Obermatt 360° View of 68 (better than 68% compared with alternatives), overall professional sentiment and financial characteristics for the stock Tapestry are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Tapestry. The consolidated Growth Rank has a good rank of 69, 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 69% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 99, which means that professional investors are more optimistic about the stock than for 99% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 33, which means that the share price of Tapestry is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 67% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 31, which means that the company has a financing structure that is riskier than those of 69% 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 68, Tapestry is better positioned than 68% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 69), and professional market sentiment is positive (Sentiment Rank of 99), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. 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 do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects 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 Tapestry very positive
ANALYSIS: With an Obermatt Sentiment Rank of 99 (better than 99% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Tapestry is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Tapestry. Analyst Opinions are at a rank of 73 (better than 73% 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 86, 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 Tapestry. The Professional Investors rank is 93, which means that currently, professional investors hold more stock in this company than in 93% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 90 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 90% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 99 (more positive than 99% compared with investment alternatives), Tapestry 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 Tapestry 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: Tapestry Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 33 (worse than 67% compared with alternatives), Tapestry 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 Tapestry. Price-to-Profit (also referred to as price-earnings, P/E) is 62 which means that the stock price compared with what market professionals expect for future profits is lower than for 62% of comparable companies, indicating a good value concerning Tapestry'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 23, which means that the stock price is lower as regards to invested capital than for 23% of comparable investments. On the other hand, Price-to-Sales is less favorable than 94% of alternatives (only 6% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 19% 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 33, is a hold recommendation based on Tapestry'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: Tapestry Growth Momentum good
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 23 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 74 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 95 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 69 |
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ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Tapestry 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 Tapestry. Capital Growth has a rank of 74, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 95 (above 95% of alternative investments). But Sales Growth has only a rank of 23, which means that, currently, professionals expect the company to grow less than 77% of its competitors, and Profit Growth is also low at a rank of 48. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Tapestry, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Tapestry Debt Financing Safety below-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 10 |
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| REFINANCING | ||||||||
| REFINANCING | 70 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 36 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 31 |
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ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Tapestry 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 Tapestry 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 Tapestry and the other two below average. Refinancing is at 70, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 70% of its competitors. But Leverage is high with a rank of 10, meaning the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. Liquidity is also on the riskier side with a rank of 36, meaning the company generates less profit to service its debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Tapestry has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Tapestry are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Tapestry Below-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 33 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| COMBINED | ||||||||
| COMBINED | 36 |
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ANALYSIS: With an Obermatt Combined Rank of 36 (worse than 64% compared with investment alternatives), Tapestry (Apparel, Accessories, Luxury, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Tapestry are low in value (priced high) with a consolidated Value Rank of 33 (worse than 67% of alternatives), and are riskily financed (Safety Rank of 31, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more
RECOMMENDATION: A Combined Rank of 36, is a hold recommendation based on Tapestry's financial characteristics. As the company Tapestry shows low value with an Obermatt Value Rank of 33 (67% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 69% of comparable companies (Obermatt Growth Rank is 69). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 31 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Tapestry, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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