October 24, 2024
Top 10 Stock J.M. Smucker Sell 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: J.M. Smucker – Top 10 Stock in S&P 500 Consumer Staples Index
J.M. Smucker is listed as a top 10 stock on October 24, 2024 in the market index S&P US Consumer because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 24 (24% performer), Obermatt issues an overall sell recommendation for J.M. Smucker on October 24, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Packaged Foods & Meats |
| Index | S&P US Consumer, S&P US Food & Beverage, 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 J.M. Smucker Sell
| 360 METRICS | October 24, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 24 |
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ANALYSIS: With an Obermatt 360° View of 24 (better than 24% compared with alternatives), overall professional sentiment and financial characteristics for the stock J.M. Smucker are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for J.M. Smucker. The consolidated Value Rank has an attractive rank of 81, which means that the share price of J.M. Smucker is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 81% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 61, which means that professional investors are more optimistic about the stock than for 61% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 19, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 6, meaning the company has a riskier financing structure than 94 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 24, J.M. Smucker is worse than 76% of all alternative stock investment opportunities based on the Obermatt Method. This means that J.M. Smucker shares are on the riskier side for investors. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 81) and positive market sentiment in the professional investor community (Sentiment Rank of 61), but growth expectations are below-average (Growth Rank of 19) and the financing structure is on the risky side(Safety Rank of 6). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of J.M. Smucker is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for J.M. Smucker positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock J.M. Smucker is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for J.M. Smucker. Analyst Opinions are at a rank of 38 (worse than 62% 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 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in J.M. Smucker. Even better, the Professional Investors rank is 81, meaning that professional investors hold more stock in this company than in 81% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 58, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 58% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), J.M. Smucker has a reputation among professional investors that is above-average compared with 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: J.M. Smucker Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2024, J.M. Smucker shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for J.M. Smucker. Price-to-Sales is 55 which means that the stock price compared with what market professionals expect for future sales is lower than for 55% of comparable companies, indicating a good value for J.M. Smucker's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 82% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 80. Compared with other companies in the same industry, dividend yields of J.M. Smucker are expected to be higher than for 83% of all competitors (a Dividend Yield rank of 83). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on J.M. Smucker's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in J.M. Smucker based on its detailed value metrics.
Growth Strategy: J.M. Smucker Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), J.M. Smucker shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for J.M. Smucker. Sales Growth has a rank of 32, which means that currently professionals expect the company to grow less than 68% of its competitors. The same is valid for Profit Growth, with a rank of 33, and Capital Growth with 28. In addition, Stock Returns have a below market rank of 49, which means that the stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: J.M. Smucker Debt Financing Safety risky
| SAFETY METRICS | October 24, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 32 |
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| REFINANCING | ||||||||
| REFINANCING | 3 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 35 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
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ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company J.M. Smucker has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of J.M. Smucker 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 all three metrics below average for J.M. Smucker. Liquidity is at 35, meaning that the company generates less profit to service its debt than 65% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 32, meaning the company has an above-average debt-to-equity ratio. It has more debt than 68% of its competitors. Finally, Refinancing is at a rank of 3 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), J.M. Smucker has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: J.M. Smucker Lowest Financial Performance
| COMBINED PERFORMANCE | October 24, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 81 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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| COMBINED | ||||||||
| COMBINED | 16 |
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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), J.M. Smucker (Packaged Foods & Meats, USA) shares have lower financial characteristics compared with similar stocks. Shares of J.M. Smucker are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives) but show below-average growth (Growth Rank of 19), and are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on J.M. Smucker's financial characteristics. As the company J.M. Smucker's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 19) and risky financing practices (Obermatt Safety Rank of 6), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 81% of comparable companies, may indicate 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. ...read more
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