August 17, 2023
Top 10 Stock JBS Hold 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: JBS – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
JBS is listed as a top 10 stock on August 17, 2023 in the market index BOVESPA because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 33 (33% performer), Obermatt assesses an overall hold recommendation for JBS on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Packaged Foods & Meats |
| Index | BOVESPA, Low Emissions, Energy Efficient, Independent Boards Growth Markets, Water Efficiency |
| 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 JBS Hold
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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| SENTIMENT | ||||||||
| SENTIMENT | 25 |
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| 360° VIEW | ||||||||
| 360° VIEW | 33 |
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ANALYSIS: With an Obermatt 360° View of 33 (better than 33% compared with alternatives), overall professional sentiment and financial characteristics for the stock JBS are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for JBS. Only the consolidated Value Rank has an attractive rank of 93, which means that the share price of JBS 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 93% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 35, meaning the company has a riskier financing structure than 65% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 75% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 25. ...read more
RECOMMENDATION: With a consolidated 360° View of 33, JBS is worse than 67% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 93. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 17), a riskier financing structure than the competition (Safety Rank of 35), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 25) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of JBS is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of JBS. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for JBS only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 25 (better than 25% compared with alternatives), overall professional sentiment and engagement for the stock JBS is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for JBS. Analyst Opinions are at a rank of 57 (better than 57% 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 and has a rank of 53 which means that currently, stock research experts are getting even more optimistic about investments in JBS. But Market Pulse has a low rank of 6, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 94% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 26, which means that, currently, professional investors hold less stock in this company than in 74% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 25 (less encouraging than 75% compared with investment alternatives), JBS has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: JBS Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2023, JBS shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for JBS. Price-to-Sales (P/S) is 97, which means that the stock price compared with what market professionals expect for future sales is lower than for 97% of comparable companies, indicating a good value regarding JBS's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 93% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 88. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 45% of all competitors have even lower dividend yields than JBS (a Dividend Yield Rank of 45). 55% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a buy recommendation based on JBS's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: JBS Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), JBS 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 three out of four indicators below average for JBS. Only Capital Growth has a good rank of 78, which means that currently professionals expect the company to grow its invested capital more than 4% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 24 which means that currently professionals expect the company to grow less than 76% of its competitors. Profit Growth with a rank of 4 and Stock Returns with a rank of 9 are also low (below 91% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for JBS is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: JBS Debt Financing Safety below-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 6 |
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| REFINANCING | ||||||||
| REFINANCING | 90 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 24 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 35 |
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ANALYSIS: With an Obermatt Safety Rank of 35 (better than 35% compared with alternatives), the company JBS 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 JBS 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 JBS and the other two below average. Refinancing is at 90, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 90% of its competitors. But Leverage is high with a rank of 6, meaning the company has an above-average debt-to-equity ratio. It has more debt than 94% of its competitors. Liquidity is also on the riskier side with a rank of 24, meaning the company generates less profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 35 (worse than 65% compared with alternatives), JBS 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 JBS 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: JBS Below-Average Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 24 |
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| COMBINED | ||||||||
| COMBINED | 46 |
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ANALYSIS: With an Obermatt Combined Rank of 46 (worse than 54% compared with investment alternatives), JBS (Packaged Foods & Meats, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of JBS are a good value (attractively priced) with a consolidated Value Rank of 93 (better than 93% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 35), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 46, is a hold recommendation based on JBS's financial characteristics. As the company JBS's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 35), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 93% 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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