November 14, 2024
Top 10 Stock The Chefs' Warehouse 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: The Chefs' Warehouse – Top 10 Stock in S&P Food & Beverage Index
The Chefs' Warehouse is listed as a top 10 stock on November 14, 2024 in the market index S&P US Food & Beverage because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and 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 52 (high 52% performer), Obermatt assesses an overall buy recommendation for The Chefs' Warehouse on November 14, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Food Distributors |
| Index | NASDAQ, S&P US Food & Beverage |
| 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 The Chefs' Warehouse Buy
| 360 METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 21 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 73 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 27 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 94 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 52 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 52 (better than 52% compared with alternatives), overall professional sentiment and financial characteristics for the stock The Chefs' Warehouse are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for The Chefs' Warehouse. The consolidated Growth Rank has a good rank of 73, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. This means that growth is higher than for 73% of competitors in the same industry. The consolidated Sentiment Rank also has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 21, which means that the share price of The Chefs' Warehouse is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 79% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 27, which means that the company has a financing structure that is riskier than those of 73% 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 52, The Chefs' Warehouse is better positioned than 52% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 73), and professional market sentiment is positive (Sentiment Rank of 94), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for The Chefs' Warehouse very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock The Chefs' Warehouse is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for The Chefs' Warehouse. Analyst Opinions are at a rank of 100 (better than 100% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 84, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in The Chefs' Warehouse. The Professional Investors rank is 72, which means that currently, professional investors hold more stock in this company than in 72% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 60 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 60% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), The Chefs' Warehouse has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean The Chefs' Warehouse stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: The Chefs' Warehouse Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 21 (worse than 79% compared with alternatives), The Chefs' Warehouse shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for The Chefs' Warehouse. Price-to-Sales (P/S) is 68, which means that the stock price compared with what market professionals expect for future sales is lower than 68% of comparable companies, indicating a good value concerning to The Chefs' Warehouse's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 53% of alternatives (only 47% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 76% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 21, is a sell recommendation based on The Chefs' Warehouse's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in The Chefs' Warehouse could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, The Chefs' Warehouse looks like an expensive investment today. ...read more
Growth Strategy: The Chefs' Warehouse Growth Momentum good
| GROWTH METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 70 |
|
||||||
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 74 |
|
||||||
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 10 |
|
||||||
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 95 |
|
||||||
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 73 |
|
||||||
ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), The Chefs' Warehouse shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for The Chefs' Warehouse. Sales Growth has a rank of 70 which means that currently, professionals expect the company to grow more than 70% of its competitors. Both Profit Growth, with a rank of 74, and Stock Returns, with a rank of 95, are also above average. But Capital Growth only has a rank of 10, which means that, currently, professionals expect the company to grow its invested capital less than 90% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 73, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: The Chefs' Warehouse Debt Financing Safety below-average
| SAFETY METRICS | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 27 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 86 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 21 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 27 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 27 (better than 27% compared with alternatives), the company The Chefs' Warehouse 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 The Chefs' Warehouse 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 The Chefs' Warehouse and the other two below average. Refinancing is at 86, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. But Leverage is high with a rank of 27, meaning the company has an above-average debt-to-equity ratio. It has more debt than 73% of its competitors. Liquidity is also on the riskier side with a rank of 21, meaning the company generates less profit to service its debt than 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 27 (worse than 73% compared with alternatives), The Chefs' Warehouse has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for The Chefs' Warehouse are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: The Chefs' Warehouse Lowest Financial Performance
| COMBINED PERFORMANCE | November 14, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 21 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 73 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 21 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 23 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), The Chefs' Warehouse (Food Distributors, USA) shares have lower financial characteristics compared with similar stocks. Shares of The Chefs' Warehouse are low in value (priced high) with a consolidated Value Rank of 21 (worse than 79% of alternatives), and are riskily financed (Safety Rank of 27, which means above-average debt burdens) but show above-average growth (Growth Rank of 73). ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on The Chefs' Warehouse's financial characteristics. As the company The Chefs' Warehouse shows low value with an Obermatt Value Rank of 21 (79% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 73% of comparable companies (Obermatt Growth Rank is 73). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 27 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for The Chefs' Warehouse, even a low-value company (in terms of its key financial indicators) can be a good investment. ...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.