November 21, 2024
Top 10 Stock Dis-Chem Pharmacies 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: Dis-Chem Pharmacies – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Dis-Chem Pharmacies 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 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for Dis-Chem Pharmacies on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Drug Retail |
| Index | 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 Dis-Chem Pharmacies Strong Buy
| 360 METRICS | November 21, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 19 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 99 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 55 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 67 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 80 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Dis-Chem Pharmacies are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Dis-Chem Pharmacies. The consolidated Growth Rank has a good rank of 99, 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 99% of competitors in the same industry. The consolidated Safety Rank at 55 means that the company has a financing structure that is safer than 55% 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 67, which means that professional investors are more optimistic about the stock than for 67% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 19, meaning that the share price of Dis-Chem Pharmacies is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 81% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 80, Dis-Chem Pharmacies is better positioned than 80% 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 99), a safe financing structure (Safety Rank of 55), and positive professional market sentiment (Sentiment Rank of 67), 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 Dis-Chem Pharmacies compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (99% better than peers). The value rank could be the reverse reflection of that (1%). 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 Dis-Chem Pharmacies positive
ANALYSIS: With an Obermatt Sentiment Rank of 67 (better than 67% compared with alternatives), overall professional sentiment and engagement for the stock Dis-Chem Pharmacies is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Dis-Chem Pharmacies. Analyst Opinions are at a rank of 51 (better than 51% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 58, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Dis-Chem Pharmacies. Finally, the Professional Investors rank is 89, which means that currently, professional investors hold more stock in this company than in 89% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 67 (more positive than 67% compared with investment alternatives), Dis-Chem Pharmacies has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 48, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 52% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Dis-Chem Pharmacies is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Dis-Chem Pharmacies Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 19 (worse than 81% compared with alternatives), Dis-Chem Pharmacies shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Dis-Chem Pharmacies. Price-to-Sales is 49 which means that the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning Dis-Chem Pharmacies's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 15, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Dis-Chem Pharmacies. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 28 and Dividend Yield, which is lower than 72% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 19, is a sell recommendation based on Dis-Chem Pharmacies's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Dis-Chem Pharmacies? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Dis-Chem Pharmacies? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Dis-Chem Pharmacies may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Dis-Chem Pharmacies Growth Momentum high
| GROWTH METRICS | November 21, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 90 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 71 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 98 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 83 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 99 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 99 (better than 99% compared with alternatives) for 2024, Dis-Chem Pharmacies shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Dis-Chem Pharmacies. Sales Growth has a value of 90, which means that, currently, professionals expect the company to grow more than 90% of its competitors. The same is valid for Profit Growth with a value of 71 and for Capital Growth with 98. In addition, Stock Returns had an above-average rank value of 83, which means they have been higher than 83% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 99, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Dis-Chem Pharmacies exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Dis-Chem Pharmacies Debt Financing Safety above-average
| SAFETY METRICS | November 21, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 34 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 54 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 58 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 55 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Dis-Chem Pharmacies 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 Dis-Chem Pharmacies 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 Dis-Chem Pharmacies. Refinancing is at 54, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Liquidity is also good at 58, meaning the company generates more profit to service its debt than 58% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 34, which means the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Dis-Chem Pharmacies has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Dis-Chem Pharmacies could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Dis-Chem Pharmacies Top Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 19 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 99 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 58 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 76 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), Dis-Chem Pharmacies (Drug Retail, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Dis-Chem Pharmacies are low in value (priced high) with a consolidated Value Rank of 19 (worse than 81% of alternatives). But they show above-average growth (Growth Rank of 99) and are safely financed (Safety Rank of 55, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on Dis-Chem Pharmacies's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Dis-Chem Pharmacies exhibits low value (Obermatt Value Rank of 19), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 99). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 55) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.