Fact based stock research
Pepkor (JSE:PPH)

ZAE000259479

How to read the free 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.

Pepkor stock research in summary

pepkor.co.za

ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Pepkor (Apparel Retail, South Africa) shares have above-average financial characteristics compared with similar stocks. Shares of Pepkor are a good value (attractively priced) with a consolidated Value Rank of 71 (better than 71% of alternatives), are safely financed (Safety Rank of 65, which means low debt burdens), but show below-average growth (Growth Rank of 29). ...read more

RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Pepkor's financial characteristics. As the company Pepkor's key financial metrics exhibit good value (Obermatt Value Rank of 71) but low growth (Obermatt Growth Rank of 29) while being safely financed (Obermatt Safety Rank of 65), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 71% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	71
Growth Rank	29
Safety Rank	65
Combined Rank	61

Country	South Africa
Industry	Apparel Retail
Index	Good Governace Growth Markets, Independent Boards Growth Markets, SDG 1, SDG 4, SDG 8, Timber Industry, JSE All Shares
Size class	X-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Pepkor

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	75	81	71
GROWTH
GROWTH	88	25	33	29
SAFETY
SAFETY	72	73	62	65
SENTIMENT
SENTIMENT	n/a	3	3	^new
360° VIEW
360° VIEW	n/a	37	32	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 31-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Pepkor is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	17	75	81	71
GROWTH
GROWTH	88	25	33	29
SAFETY
SAFETY	72	73	62	65
COMBINED
COMBINED	38	65	68	61

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Pepkor the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 71 (better than 71% compared with alternatives), Pepkor shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Pepkor. Price-to-Profit (also referred to as price-earnings, P/E) is 58 which means that the stock price compared with what market professionals expect for future profits is lower than for 58% of comparable companies, indicating a good value concerning Pepkor'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 83, which means that the stock price is lower as regards to invested capital than for 83% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 52% of alternatives (only 48% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 51% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 71, is a buy recommendation based on Pepkor's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	47	48	53	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	1	60	71	58
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	61	90	89	83
DIVIDEND YIELD
DIVIDEND YIELD	1	61	51	49
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	17	75	81	71

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Pepkor; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), Pepkor 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 Pepkor. Sales Growth has a rank of 53 which means that currently professionals expect the company to grow more than 53% of its competitors. Stock Returns are also above average with a rank of 69. But Capital Growth has only a rank of 10, which means that currently professionals expect the company to grow its invested capital less than 90% of its competitors. Profit Growth is also low, with a rank of only 28, 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 29, is a hold 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 69% 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. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	68	17	38	53
PROFIT GROWTH
PROFIT GROWTH	n/a	28	45	28
CAPITAL GROWTH
CAPITAL GROWTH	n/a	26	48	10
STOCK RETURNS
STOCK RETURNS	86	89	41	69
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	88	25	33	29

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Pepkor.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Pepkor has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Pepkor 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 two out of three are above average for Pepkor.Leverage is at 73, meaning the company has a below-average debt-to-equity ratio. It has less debt than 73% of its competitors.Refinancing is at a rank of 60, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 60% of its competitors. Liquidity is at 47, meaning that the company generates less profit to service its debt than 53% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Pepkor has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Pepkor more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	48	84	78	73
REFINANCING
REFINANCING	71	63	65	60
LIQUIDITY
LIQUIDITY	74	49	42	47
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	72	73	62	65

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Pepkor and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	14	22	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	18	29	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	49	32	^new
MARKET PULSE
MARKET PULSE	n/a	40	28	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	3	3	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Pepkor.
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