September 12, 2024
Top 10 Stock Sainsbury 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: Sainsbury – Top 10 Stock in FTSE 100 Index
Sainsbury is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 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 59 (high 59% performer), Obermatt assesses an overall buy recommendation for Sainsbury on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Food Retail |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU |
| 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 Sainsbury Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| SENTIMENT | ||||||||
| SENTIMENT | 32 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° View of 59 (better than 59% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sainsbury are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Sainsbury. Only the consolidated Value Rank has an attractive rank of 92, which means that the share price of Sainsbury 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 92% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 46, 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 37, meaning the company has a riskier financing structure than 63% 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 68% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 32. ...read more
RECOMMENDATION: With a consolidated 360° View of 59, Sainsbury is better positioned than 59% 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 92. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 46), a riskier financing structure than the competition (Safety Rank of 37), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 32) 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 Sainsbury 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 Sainsbury. 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 Sainsbury only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 32 (better than 32% compared with alternatives), overall professional sentiment and engagement for the stock Sainsbury is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Sainsbury. Analyst Opinions are at a rank of 37 (worse than 63% 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 means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in Sainsbury. But the Professional Investors rank is low at 45, which means that professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 39, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 61% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 32 (less encouraging than 68% compared with investment alternatives), Sainsbury has a reputation among professional investors that is below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: Sainsbury Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 92 (better than 92% compared with alternatives) for 2024, Sainsbury shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sainsbury. Price-to-Sales is 80 which means that the stock price compared with what market professionals expect for future sales is lower than for 80% of comparable companies, indicating a good value for Sainsbury's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 53% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 77. Compared with other companies in the same industry, dividend yields of Sainsbury are expected to be higher than for 77% of all competitors (a Dividend Yield rank of 77). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 92, is a buy recommendation based on Sainsbury's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Sainsbury based on its detailed value metrics.
Growth Strategy: Sainsbury Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 11 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 34 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 55 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 69 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 46 |
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ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Sainsbury 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 half of the indicators below and half above average for Sainsbury. Capital Growth has a rank of 55, which means that currently professionals expect the company to grow its invested capital more than 34% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 69 (above 69% of alternative investments). But Sales Growth has only a rank of 11, which means that, currently, professionals expect the company to grow less than 89% of its competitors, and Profit Growth is also low at a rank of 34. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Sainsbury, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Sainsbury Debt Financing Safety below-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 9 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 46 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 37 |
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ANALYSIS: With an Obermatt Safety Rank of 37 (better than 37% compared with alternatives), the company Sainsbury 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 Sainsbury 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 Sainsbury and the other two below average. Leverage is at a rank of 57 meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors.Refinancing is at a rank of 9, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 91% of its competitors. Liquidity is at a rank of 46, meaning that the company generates less profit to service its debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 37 (worse than 63% compared with alternatives), Sainsbury has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Sainsbury are on the safer side. ...read more
Combined financial peformance: Sainsbury Top Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 46 |
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| COMBINED | ||||||||
| COMBINED | 84 |
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ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Sainsbury (Food Retail, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Sainsbury are a good value (attractively priced) with a consolidated Value Rank of 92 (better than 92% of alternatives) but show below-average growth (Growth Rank of 46), and are riskily financed (Safety Rank of 37), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Sainsbury's financial characteristics. As the company Sainsbury's key financial metrics exhibit good value (Obermatt Value Rank of 92) but low growth (Obermatt Growth Rank of 46) and risky financing practices (Obermatt Safety Rank of 37), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 92% 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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