November 14, 2024
Top 10 Stock Lancaster Colony 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: Lancaster Colony – Top 10 Stock in S&P Food & Beverage Index
Lancaster Colony is listed as a top 10 stock on November 14, 2024 in the market index S&P US Food & Beverage because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Lancaster Colony on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Packaged Foods & Meats |
| Index | NASDAQ, S&P US Food & Beverage, S&P MIDCAP |
| 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 Lancaster Colony Buy
| 360 METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 11 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 75 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 94 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 41 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 61 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Lancaster Colony are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Lancaster Colony. The consolidated Growth Rank has a good rank of 75, 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 75% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 94 which means that the company has a financing structure that is safer than 94% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 11 which means that the share price of Lancaster Colony is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 89% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 41, which means that professional investors are more pessimistic about the stock than for 59% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Lancaster Colony is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 75), and the company is safely financed (Safety Rank of 94). However, professional market sentiment is low(Sentiment Rank of 41). The negative market view on Lancaster Colony may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Lancaster Colony compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Lancaster Colony only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 41 (better than 41% compared with alternatives), overall professional sentiment and engagement for the stock Lancaster Colony is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Lancaster Colony. Analyst Opinions are at a rank of 21 (worse than 79% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 30, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). On the upside, the Professional Investors rank is 84, which means that professional investors hold more stock in this company than in 84% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 41 (less encouraging than 59% compared with investment alternatives), Lancaster Colony has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Lancaster Colony stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Lancaster Colony Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Lancaster Colony 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 Lancaster Colony. Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than 83% of comparable companies, indicating a low value concerning Lancaster Colony's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 12, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Lancaster Colony. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 12 and Dividend Yield, which is lower than 52% 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 11, is a sell recommendation based on Lancaster Colony's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Lancaster Colony? 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 Lancaster Colony? 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. Lancaster Colony 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: Lancaster Colony Growth Momentum high
| GROWTH METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 46 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 64 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 67 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 71 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 75 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 75 (better than 75% compared with alternatives) for 2024, Lancaster Colony 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 but one indicator above average for Lancaster Colony. Profit Growth has a rank of 64 which means that currently professionals expect the company to grow its profits more than 64% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 67, and Stock Returns has a rank of 71 which means that the stock returns have recently been above 71% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 46 (54% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 75, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Lancaster Colony Debt Financing Safety very solid
| SAFETY METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 90 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 41 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2024, the company Lancaster Colony has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Lancaster Colony 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 Lancaster Colony. Leverage is at a rank of 90, meaning the company has a below-average debt-to-equity ratio. It has less debt than 90% of its competitors. Liquidity is also good at a rank of 100, meaning the company generates more profit to service its debt than 100% 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 41, 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 59% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), Lancaster Colony 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 Lancaster Colony. 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: Lancaster Colony Above-Average Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 11 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 75 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 100 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 70 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), Lancaster Colony (Packaged Foods & Meats, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Lancaster Colony are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives). But they show above-average growth (Growth Rank of 75) and are safely financed (Safety Rank of 94, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on Lancaster Colony's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Lancaster Colony exhibits low value (Obermatt Value Rank of 11), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 75). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 94) 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.