November 21, 2024
Top 10 Stock Rand Merchant 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: Rand Merchant – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Rand Merchant is listed as a top 10 stock on November 21, 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 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Rand Merchant on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Life & Health Insurance |
| Index | Independent Boards Growth Markets, JSE All Shares |
| 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 Rand Merchant Buy
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 81 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock Rand Merchant are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Rand Merchant. The consolidated Growth Rank has a good rank of 97, 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 97% of competitors in the same industry. The consolidated Safety Rank at 98 means that the company has a financing structure that is safer than 98% 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 81, which means that professional investors are more optimistic about the stock than for 81% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 15, meaning that the share price of Rand Merchant is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 85% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Rand Merchant is better positioned than 72% 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 97), a safe financing structure (Safety Rank of 98), and positive professional market sentiment (Sentiment Rank of 81), 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 Rand Merchant compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (97% better than peers). The value rank could be the reverse reflection of that (3%). 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 Rand Merchant very positive
ANALYSIS: With an Obermatt Sentiment Rank of 81 (better than 81% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock Rand Merchant is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Rand Merchant. Analyst Opinions are at a rank of 25 (worse than 75% 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 Rand Merchant. Even better, the Professional Investors rank is 76, meaning that professional investors hold more stock in this company than in 76% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 91, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 81 (more positive than 81% compared with investment alternatives), Rand Merchant has a reputation among professional investors that is significantly higher than 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: Rand Merchant Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 15 (worse than 85% compared with alternatives), Rand Merchant shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Rand Merchant. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 53% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 40 which means that the stock price compared with what market professionals expect for future profits is higher than 60% of comparable companies, indicating a low value concerning Rand Merchant's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 11 which means that the stock price compared with what market professionals expect for future profit levels is higher than 89% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 7 is also low. Compared with invested capital, the stock price is higher than for 93% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 15, is a sell recommendation based on Rand Merchant's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Rand Merchant? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Rand Merchant only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Rand Merchant Growth Momentum high
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 77 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 70 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 67 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 97 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 97 |
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ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2022, Rand Merchant 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 Rand Merchant. Sales Growth has a value of 77, which means that, currently, professionals expect the company to grow more than 77% of its competitors. The same is valid for Profit Growth with a value of 70 and for Capital Growth with 67. In addition, Stock Returns had an above-average rank value of 97, which means they have been higher than 97% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Rand Merchant 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: Rand Merchant Debt Financing Safety very solid
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 90 |
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| REFINANCING | ||||||||
| REFINANCING | 65 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 96 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2022, the company Rand Merchant has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Rand Merchant 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 all three are above average for Rand Merchant. Leverage is at 90, meaning the company has a below-average debt-to-equity ratio. It has less debt than 90% of its competitors. Refinancing is at a rank of 65, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 65% of its competitors. Finally, Liquidity is also good at a rank of 96, which means that the company generates more profit to service its debt than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Rand Merchant has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Rand Merchant Top Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 15 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Rand Merchant (Life & Health Insurance, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Rand Merchant are low in value (priced high) with a consolidated Value Rank of 15 (worse than 85% of alternatives). But they show above-average growth (Growth Rank of 97) and are safely financed (Safety Rank of 98, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Rand Merchant's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Rand Merchant exhibits low value (Obermatt Value Rank of 15), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 97). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 98) 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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