June 13, 2024
Top 10 Stock Sonae Hold 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: Sonae – Top 10 Stock in PSI-20 Index
Sonae is listed as a top 10 stock on June 13, 2024 in the market index PSI 20 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Sonae on June 13, 2024.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Food Retail |
| Index | Dividends Europe, Low Waste, Recycling, PSI General, PSI 20 |
| 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 Sonae Hold
| 360 METRICS | June 13, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 16 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 65 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 37 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Sonae are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Sonae. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Sonae 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 94% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 21, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 16, meaning the company has a riskier financing structure than 84 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 37, Sonae is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 94) and positive market sentiment in the professional investor community (Sentiment Rank of 65), but growth expectations are below-average (Growth Rank of 21) and the financing structure is on the risky side(Safety Rank of 16). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive 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. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Sonae is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Sonae positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Sonae is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Sonae. Analyst Opinions are at a rank of 90 (better than 90% 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 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Sonae. Finally, the Professional Investors rank is 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Sonae has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 26, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 74% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Sonae is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Sonae Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2024, Sonae shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sonae. Price-to-Sales is 62 which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value for Sonae's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 90% 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 Sonae are expected to be higher than for 87% of all competitors (a Dividend Yield rank of 87). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Sonae'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 Sonae based on its detailed value metrics.
Growth Strategy: Sonae Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Sonae 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 half of the indicators below and half above average for Sonae. Sales Growth has a rank of 60 which means that currently professionals expect the company to grow more than 60% of its competitors. Stock Returns are also above average with a rank of 58. But Capital Growth has only a rank of 23, which means that currently professionals expect the company to grow its invested capital less than 77% of its competitors. Profit Growth is also low, with a rank of only 9, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 58% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Sonae Debt Financing Safety risky
| SAFETY METRICS | June 13, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 58 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 10 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 16 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 16 (better than 16% compared with alternatives), the company Sonae has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Sonae 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 Sonae and the other two below average. Leverage is at a rank of 58 meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors.Refinancing is at a rank of 10, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. Liquidity is at a rank of 27, meaning that the company generates less profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 16 (worse than 84% compared with alternatives), Sonae has a financing structure that is significantly 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 Sonae are on the safer side. ...read more
Combined financial peformance: Sonae Below-Average Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 94 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 21 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 27 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 26 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Sonae (Food Retail, Portugal) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Sonae are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives) but show below-average growth (Growth Rank of 21), and are riskily financed (Safety Rank of 16), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Sonae's financial characteristics. As the company Sonae's key financial metrics exhibit good value (Obermatt Value Rank of 94) but low growth (Obermatt Growth Rank of 21) and risky financing practices (Obermatt Safety Rank of 16), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 94% 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.