June 6, 2024
Top 10 Stock Signet Jewelers 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: Signet Jewelers – Top 10 Stock in Good Governance in Growth Markets
Signet Jewelers is listed as a top 10 stock on June 06, 2024 in the market index Good Governace Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 63 (high 63% performer), Obermatt assesses an overall buy recommendation for Signet Jewelers on June 06, 2024.
Snapshot: Obermatt Ranks
| Country | Bermuda |
| Industry | Specialty Stores |
| Index | Good Governace Growth Markets |
| 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 Signet Jewelers Buy
| 360 METRICS | June 6, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 31 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 100 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 57 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 63 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 63 (better than 63% compared with alternatives), overall professional sentiment and financial characteristics for the stock Signet Jewelers are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Signet Jewelers. The consolidated Sentiment Rank has a good rank of 57, which means that professional investors are more optimistic about the stock than for 57% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 100 or better than 100% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 29, meaning that the share price of Signet Jewelers is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 31. ...read more
RECOMMENDATION: With a consolidated 360° View of 63, Signet Jewelers is better positioned than 63% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 57) and safe financing practices (Safety Rank of 100), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Signet Jewelerṣ is bright. 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 Signet Jewelers positive
ANALYSIS: With an Obermatt Sentiment Rank of 57 (better than 57% compared with alternatives), overall professional sentiment and engagement for the stock Signet Jewelers is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Signet Jewelers. Analyst Opinions are at a rank of 36 (worse than 64% 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 are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Signet Jewelers. More encouragingly, the Professional Investors rank is 93, which means that professional investors hold more stock in this company than in 93% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 16, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 84% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 57 (more positive than 57% compared with investment alternatives), Signet Jewelers has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Signet Jewelers. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Signet Jewelers Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Signet Jewelers shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Signet Jewelers. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 60, which means that the stock price compared with what market professionals expect for future profits is lower than for 60% of comparable companies, indicating a good value concerning Signet Jewelers's profit levels. But Price-to-Sales is 40 which means that the stock price compared with what market professionals expect for future profits is higher than for 60% of comparable companies, indicating a low value concerning Signet Jewelers'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 42 and for dividend yield, which is lower than for 78% 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 29, is a hold recommendation based on Signet Jewelers's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Signet Jewelers is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: Signet Jewelers Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Signet Jewelers 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 Signet Jewelers. Capital Growth has a rank of 56, which means that currently professionals expect the company to grow its invested capital more than 8% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 93 (above 93% of alternative investments). But Sales Growth has only a rank of 15, which means that, currently, professionals expect the company to grow less than 85% of its competitors, and Profit Growth is also low at a rank of 8. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, 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 Signet Jewelers, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Signet Jewelers Debt Financing Safety very solid
| SAFETY METRICS | June 6, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 98 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 85 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2024, the company Signet Jewelers has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Signet Jewelers 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 Signet Jewelers. Leverage is at 98, meaning the company has a below-average debt-to-equity ratio. It has less debt than 98% of its competitors. Refinancing is at a rank of 85, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Signet Jewelers 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: Signet Jewelers Above-Average Financial Performance
| COMBINED PERFORMANCE | June 6, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 29 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 31 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 100 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 59 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Signet Jewelers (Specialty Stores, Bermuda) shares have above-average financial characteristics compared with similar stocks. Shares of Signet Jewelers are low in value (priced high) with a consolidated Value Rank of 29 (worse than 71% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 100), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 59, is a buy recommendation based on Signet Jewelers's financial characteristics. As the company Signet Jewelers's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 29) and low growth (Obermatt Growth Rank of 31), 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 100) 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.