March 7, 2024
Top 10 Stock The North West Strong 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 North West – Top 10 Stock in Toronto Stock Exchange Index TSX Composite
The North West is listed as a top 10 stock on March 07, 2024 in the market index TSX Composite because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 98 (top 98% performer), Obermatt assesses an overall strong buy recommendation for The North West on March 07, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Food Retail |
| Index | TSX Composite |
| 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 The North West Strong Buy
| 360 METRICS | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 70 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| SENTIMENT | ||||||||
| SENTIMENT | 84 |
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| 360° VIEW | ||||||||
| 360° VIEW | 98 |
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ANALYSIS: With an Obermatt 360° View of 98 (better than 98% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock The North West are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for The North West. The consolidated Value Rank has an attractive rank of 84, which means that the share price of The North West is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 84% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 70, 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. The company is also safely financed with a Safety rank of 58. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 84. ...read more
RECOMMENDATION: With a consolidated 360° View of 98, The North West is better positioned than 98% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 84), above-average growth (Growth Rank of 70), safe financing practices (Safety Rank of 58), and a positive market sentiment in the professional investor community (Sentiment Rank of 84), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of The North West is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for The North West very positive
ANALYSIS: With an Obermatt Sentiment Rank of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock The North West is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for The North West. Analyst Opinions are at a rank of 30 (worse than 70% 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 indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in The North West. Even better, the Professional Investors rank is 100, meaning that professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 83, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 83% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% compared with investment alternatives), The North West has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: The North West Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2024, The North West shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for The North West. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning The North West'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 43, which means that the stock price is lower as regards to invested capital than for 43% of comparable investments. On the other hand, Price-to-Sales is less favorable than 55% of alternatives (only 45% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 6% 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 84, is a buy recommendation based on The North West'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 in respect to expected revenues, it means that 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 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 pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: The North West Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 70 (better than 70% compared with alternatives), The North West 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 North West. Profit Growth has a rank of 79 which means that currently professionals expect the company to grow its profits more than 79% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 77, and Stock Returns has a rank of 69 which means that the stock returns have recently been above 69% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 43 (57% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 70, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: The North West Debt Financing Safety above-average
| SAFETY METRICS | March 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 49 |
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| REFINANCING | ||||||||
| REFINANCING | 57 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 68 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
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ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company The North West 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 The North West 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, with two out of three indicators above-average for The North West. Refinancing is at 57, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 57% of its competitors. Liquidity is also good at 68, meaning the company generates more profit to service its debt than 68% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 49, which means the company has an above-average debt-to-equity ratio. It has more debt than 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 58 (better than 58% compared with alternatives), The North West has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and The North West could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: The North West Top Financial Performance
| COMBINED PERFORMANCE | March 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 70 |
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| SAFETY | ||||||||
| SAFETY | 68 |
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| COMBINED | ||||||||
| COMBINED | 95 |
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ANALYSIS: With an Obermatt Combined Rank of 95 (better than 95% compared with investment alternatives), The North West (Food Retail, Canada) shares have much better financial characteristics than comparable stocks. Shares of The North West are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives), show above-average growth (Growth Rank of 70), and are safely financed (Safety Rank of 58), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 95, is a strong buy recommendation based on The North West's financial characteristics. As the company The North West's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 84), above-average growth (Obermatt Growth Rank of 70), and indicate that the company is safely financed (Obermatt Safety Rank of 58), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of The North West. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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