July 13, 2023
Top 10 Stock La Française des Jeux 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: La Française des Jeux – Top 10 Stock in Société des Bourses Françaises Index SBF 120
La Française des Jeux is listed as a top 10 stock on July 13, 2023 in the market index SBF 120 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is safely financed, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for La Française des Jeux on July 13, 2023.
Snapshot: Obermatt Ranks
| Country | France |
| Industry | Casinos & Gaming |
| Index | CAC All, SBF 120, Dividends Europe, Employee Focus EU, Sound Pay Europe |
| 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 La Française des Jeux Hold
| 360 METRICS | July 13, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 31 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 27 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 82 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 49 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 45 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock La Française des Jeux are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four metrics below average for La Française des Jeux. The only rank that is above average is the consolidated Safety Rank at 82, which means that the company has a financing structure that is safer than those of 82% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the Value, Growth and Sentiment Ranks are all below average. The consolidated Value Rank has a less desirable rank of 31, which means that the share price of La Française des Jeux is on the high side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 27, which implies 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. Finally, the consolidated Sentiment Rank is also low at a rank of 49, which means that professional investors are more pessimistic about the stock than for 51% of alternative investment opportunities. While Safety is strong, it’s not the most critical indicator, so we suggest proceeding with caution if you are considering this stock. ...read more
RECOMMENDATION: With a consolidated 360° View of 45, La Française des Jeux is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. As only the financing structure, namely the Safety Rank, is on the safer side and all other consolidated Obermatt Ranks are below-average, this is a riskier stock investment proposition. This is especially the case, since professional investor sentiment, the consolidated Obermatt Sentiment Rank, is also low at 49. The negative market view on La Française des Jeux may be the high stock price (low value) or the low level of growth. This is a problem. As the Safety Rank is the least significant of the four consolidated Obermatt Ranks, we cannot identify enough positive facts that are visible today to make a case for this stock investment. The company may have a strong future which would justify the high stock price, but this is not visible from investor behavior today. As market sentiment is critical, you should be careful with paying more than market-average for this stock, and conduct further research into the company's future growth potential. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for La Française des Jeux only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock La Française des Jeux is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for La Française des Jeux. Analyst Opinions are at a rank of 1 (worse than 99% 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 La Française des Jeux. Even better, the Professional Investors rank is 84, meaning that professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 67, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 67% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), La Française des Jeux has a reputation among professional investors that is below 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: La Française des Jeux Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), La Française des Jeux 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 La Française des Jeux. Price-to-Profit (also referred to as price-earnings, P/E) is 55 which means that the stock price compared with what market professionals expect for future profits is lower than for 55% of comparable companies, indicating a good value concerning La Française des Jeux'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 81% of alternatives (only 19% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 10% 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 31, is a hold recommendation based on La Française des Jeux'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: La Française des Jeux Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), La Française des Jeux 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 three out of four indicators below average for La Française des Jeux. Sales Growth has a below market rank of 16, which means that, currently, professionals expect the company to grow less than 84% of its competitors. The same is valid for Capital Growth, with a rank of 40, and Profit Growth, with a rank of 46. Currently, professionals expect the company to grow its profits less than 54% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 55, which means that the stock returns have recently been above 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for La Française des Jeux, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: La Française des Jeux Debt Financing Safety very solid
| SAFETY METRICS | July 13, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 72 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 43 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 98 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2023, the company La Française des Jeux has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of La Française des Jeux 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 La Française des Jeux. Leverage is at a rank of 72, meaning the company has a below-average debt-to-equity ratio. It has less debt than 72% of its competitors. Liquidity is also good at a rank of 98, meaning the company generates more profit to service its debt than 98% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 43, 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 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), La Française des Jeux has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for La Française des Jeux. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: La Française des Jeux Below-Average Financial Performance
| COMBINED PERFORMANCE | July 13, 2023 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 31 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 27 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 98 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 45 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), La Française des Jeux (Casinos & Gaming, France) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of La Française des Jeux are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives) and show below-average growth (Growth Rank of 27) but are safely financed (Safety Rank of 82), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on La Française des Jeux's financial characteristics. As the company La Française des Jeux's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 31) and low growth (Obermatt Growth Rank of 27), 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. In this case, good financing practices (Obermatt Safety Rank of 82) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...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.