April 11, 2024
Top 10 Stock Truworths International 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: Truworths International – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
truworths.co.zalegal?page=manual
Truworths International is listed as a top 10 stock on April 11, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 82 (top 82% performer), Obermatt assesses an overall strong buy recommendation for Truworths International on April 11, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Apparel Retail |
| Index | Human Rights, Independent Boards Growth Markets, JSE All Shares |
| 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 Truworths International Strong Buy
| 360 METRICS | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 75 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 82 |
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ANALYSIS: With an Obermatt 360° View of 82 (better than 82% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Truworths International are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Truworths International. The consolidated Value Rank has an attractive rank of 75, which means that the share price of Truworths International is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 75% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 80. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 65. But the consolidated Growth Rank has a low rank of 33, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 67 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 82, Truworths International is better positioned than 82% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 75), secure financing practices (Safety Rank of 80), and positive market sentiment in the professional investor community (Sentiment Rank of 65). 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. The company’s growth expectations are below the industry average (Growth Rank of 33), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Truworths International is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Truworths International positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Truworths International is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Truworths International. Analyst Opinions are at a rank of 54 (better than 54% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 79 which means that currently, professional investors hold more stock in this company than in 79% of alternative investment opportunities. But Analyst Opinions Change has a rank of 35, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Truworths International. Furthermore, Market Pulse has a rank of 48, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 52% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Truworths International has a reputation among professional investors that is above-average compared with that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Truworths International Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 75 (better than 75% compared with alternatives) for 2024, Truworths International 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 Truworths International. Price-to-Profit (also referred to as price-earnings, P/E) is 95 which means that the stock price compared with what market professionals expect for future profits is lower than for 95% of comparable companies, indicating a good value concerning Truworths International'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 35, which means that the stock price is lower as regards to invested capital than for 35% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 2% 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 75, is a buy recommendation based on Truworths International'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: Truworths International Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 33 (better than 33% compared with alternatives), Truworths International 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 three out of four indicators below average for Truworths International. Sales Growth has a below market rank of 25, which means that, currently, professionals expect the company to grow less than 75% of its competitors. The same is valid for Capital Growth, with a rank of 23, and Profit Growth, with a rank of 23. Currently, professionals expect the company to grow its profits less than 77% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 91, which means that the stock returns have recently been above 91% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 33, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Truworths International, 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: Truworths International Debt Financing Safety very solid
| SAFETY METRICS | April 11, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 69 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 85 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 80 |
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ANALYSIS: With an Obermatt Safety Rank of 80 (better than 80% compared with alternatives) for 2024, the company Truworths International has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Truworths International 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 all three are above average for Truworths International. Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Refinancing is at a rank of 69, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Finally, Liquidity is also good at a rank of 85, which means that the company generates more profit to service its debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 80 (better than 80% compared with alternatives), Truworths International has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Truworths International Top Financial Performance
| COMBINED PERFORMANCE | April 11, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 75 |
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| GROWTH | ||||||||
| GROWTH | 33 |
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| SAFETY | ||||||||
| SAFETY | 85 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Truworths International (Apparel Retail, South Africa) shares have much better financial characteristics than comparable stocks. Shares of Truworths International are a good value (attractively priced) with a consolidated Value Rank of 75 (better than 75% of alternatives), are safely financed (Safety Rank of 80, which means low debt burdens), but show below-average growth (Growth Rank of 33). ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Truworths International's financial characteristics. As the company Truworths International's key financial metrics exhibit good value (Obermatt Value Rank of 75) but low growth (Obermatt Growth Rank of 33) while being safely financed (Obermatt Safety Rank of 80), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 75% 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. ...read more
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