April 11, 2024
Top 10 Stock Naspers 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: Naspers – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Naspers is listed as a top 10 stock on April 11, 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 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for Naspers on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Internet Retail |
| Index | JSE All Shares |
| 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 Naspers Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 96 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| SENTIMENT | ||||||||
| SENTIMENT | 90 |
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| 360° VIEW | ||||||||
| 360° VIEW | 96 |
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ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Naspers are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Naspers. The consolidated Growth Rank has a good rank of 96, 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 96% of competitors in the same industry. The consolidated Safety Rank at 76 means that the company has a financing structure that is safer than 76% 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 90, which means that professional investors are more optimistic about the stock than for 90% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 28, meaning that the share price of Naspers is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 72% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, Naspers is better positioned than 96% 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 96), a safe financing structure (Safety Rank of 76), and positive professional market sentiment (Sentiment Rank of 90), 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 Naspers compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (96% better than peers). The value rank could be the reverse reflection of that (4%). 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 Naspers very positive
ANALYSIS: With an Obermatt Sentiment Rank of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Naspers is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Naspers. Analyst Opinions are at a rank of 93 (better than 93% 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 86, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 73, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 73% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 18, which means that currently, professional investors hold less stock in this company than in 82% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 90 (more positive than 90% compared with investment alternatives), Naspers has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Naspers may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Naspers. ...read more
Value Strategy: Naspers Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), Naspers 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 Naspers. Price-to-Profit (also referred to as price-earnings, P/E) is 75 which means that the stock price compared with what market professionals expect for future profits is lower than for 75% of comparable companies, indicating a good value concerning Naspers'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 61, which means that the stock price is lower as regards to invested capital than for 61% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 86% of alternatives (only 14% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 78% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 28, is a hold recommendation based on Naspers'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 concerning expected revenues, 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 Group or 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 distribute it to shareholders through dividends, 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: Naspers Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 96 (better than 96% compared with alternatives) for 2024, Naspers 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 Naspers. Sales Growth has a value of 83, which means that, currently, professionals expect the company to grow more than 83% of its competitors. The same is valid for Profit Growth with a value of 93 and for Capital Growth with 82. In addition, Stock Returns had an above-average rank value of 54, which means they have been higher than 54% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 96, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Naspers 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: Naspers Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 86 |
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| REFINANCING | ||||||||
| REFINANCING | 99 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 76 |
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ANALYSIS: With an Obermatt Safety Rank of 76 (better than 76% compared with alternatives) for 2024, the company Naspers has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Naspers 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 where two out of three are above average for Naspers.Leverage is at 86, meaning the company has a below-average debt-to-equity ratio. It has less debt than 86% of its competitors.Refinancing is at a rank of 99, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 99% of its competitors. Liquidity is at 10, meaning that the company generates less profit to service its debt than 90% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 76 (better than 76% compared with alternatives), Naspers has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Naspers Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 28 |
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| GROWTH | ||||||||
| GROWTH | 96 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Naspers (Internet Retail, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Naspers are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives). But they show above-average growth (Growth Rank of 96) and are safely financed (Safety Rank of 76, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Naspers's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Naspers exhibits low value (Obermatt Value Rank of 28), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 96). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 76) 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
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