July 18, 2024
Top 10 Stock SMU Sell 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: SMU – Top 10 Stock in Independent Boards in Growth Markets
SMU is listed as a top 10 stock on July 18, 2024 in the market index Independent Boards Growth Markets 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 20 (20% performer), Obermatt issues an overall sell recommendation for SMU on July 18, 2024.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Food Retail |
| Index | IPSA, Good Governace Growth Markets, Independent Boards Growth Markets |
| 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 SMU Sell
| 360 METRICS | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 14 |
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| SAFETY | ||||||||
| SAFETY | 28 |
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| SENTIMENT | ||||||||
| SENTIMENT | 45 |
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| 360° VIEW | ||||||||
| 360° VIEW | 20 |
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ANALYSIS: With an Obermatt 360° View of 20 (better than 20% compared with alternatives), overall professional sentiment and financial characteristics for the stock SMU are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for SMU. Only the consolidated Value Rank has an attractive rank of 72, which means that the share price of SMU 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 72% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 14, 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 28, meaning the company has a riskier financing structure than 72% 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 55% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 45. ...read more
RECOMMENDATION: With a consolidated 360° View of 20, SMU is worse than 80% of all alternative stock investment opportunities based on the Obermatt Method. This means that SMU shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 72. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 14), a riskier financing structure than the competition (Safety Rank of 28), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 45) 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 SMU 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 SMU. 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 SMU only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 45 (better than 45% compared with alternatives), overall professional sentiment and engagement for the stock SMU is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for SMU. Analyst Opinions are at a rank of 79 (better than 79% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. Market Pulse is also positive with a rank of 54, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 54% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 4, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in SMU. There are also only so many institutional investors holding company stock with a Professional Investors rank of 49, which means that, currently, professional investors hold less stock in this company than in 51% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 45 (less encouraging than 55% compared with investment alternatives), SMU has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: SMU Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% compared with alternatives), SMU shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for SMU. Price-to-Sales (P/S) is 65, which means that the stock price compared with what market professionals expect for future sales is lower than for 65% of comparable companies, indicating a good value concerning SMU's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 55% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 100 (dividends are expected to be higher than 100% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 59% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for SMU to 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 72, is a buy recommendation based on SMU's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: SMU Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 14 (better than 14% compared with alternatives), SMU shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for SMU. Sales Growth has a below market rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors. The same is valid for Capital Growth, with a rank of 6, and Profit Growth, with a rank of 14. Currently, professionals expect the company to grow its profits less than 86% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 63, which means that the stock returns have recently been above 63% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 14, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for SMU, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: SMU Debt Financing Safety below-average
| SAFETY METRICS | July 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 30 |
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| REFINANCING | ||||||||
| REFINANCING | 23 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
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ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company SMU 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 SMU 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 all three metrics below average for SMU. Liquidity is at 48, meaning that the company generates less profit to service its debt than 52% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 30, meaning the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. Finally, Refinancing is at a rank of 23 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 77% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), SMU has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: SMU Lowest Financial Performance
| COMBINED PERFORMANCE | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 14 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), SMU (Food Retail, Chile) shares have lower financial characteristics compared with similar stocks. Shares of SMU are a good value (attractively priced) with a consolidated Value Rank of 72 (better than 72% of alternatives) but show below-average growth (Growth Rank of 14), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on SMU's financial characteristics. As the company SMU's key financial metrics exhibit good value (Obermatt Value Rank of 72) but low growth (Obermatt Growth Rank of 14) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 72% 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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