Fact based stock research
WH Smith (LSE:SMWH)
GB00B2PDGW16
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.
WH Smith stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), WH Smith (Specialty Stores, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of WH Smith are a good value (attractively priced) with a consolidated Value Rank of 52 (better than 52% of alternatives) but show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on WH Smith's financial characteristics. As the company WH Smith's key financial metrics exhibit good value (Obermatt Value Rank of 52) but low growth (Obermatt Growth Rank of 49) and risky financing practices (Obermatt Safety Rank of 12), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 52% 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. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | United Kingdom |
| Industry | Specialty Stores |
| Index | FTSE All Shares, FTSE 250, FTSE 350, Human Rights, Renewables Users, SDG 10, SDG 12, SDG 13, SDG 4, SDG 8 |
| Size class | Large |
19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: WH Smith
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
25 |
|
28 |
|
52 |
|
| GROWTH | ||||||||
| GROWTH | 44 |
|
57 |
|
45 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 11 |
|
6 |
|
23 |
|
12 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
81 |
|
90 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
33 |
|
39 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 19 (worse than 81% compared with investment alternatives), WH Smith (Specialty Stores, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of WH Smith are a good value (attractively priced) with a consolidated Value Rank of 52 (better than 52% of alternatives) but show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 19, is a sell recommendation based on WH Smith's financial characteristics. As the company WH Smith's key financial metrics exhibit good value (Obermatt Value Rank of 52) but low growth (Obermatt Growth Rank of 49) and risky financing practices (Obermatt Safety Rank of 12), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 52% 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. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
25 |
|
28 |
|
52 |
|
| GROWTH | ||||||||
| GROWTH | 44 |
|
57 |
|
45 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 11 |
|
6 |
|
23 |
|
12 |
|
| COMBINED | ||||||||
| COMBINED | 1 |
|
12 |
|
8 |
|
19 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 52 (better than 52% compared with alternatives), WH Smith 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 WH Smith. Price-to-Profit (also referred to as price-earnings, P/E) is 59 which means that the stock price compared with what market professionals expect for future profits is lower than for 59% of comparable companies, indicating a good value concerning WH Smith'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 34, which means that the stock price is lower as regards to invested capital than for 34% of comparable investments. On the other hand, Price-to-Sales is less favorable than 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 35% 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 52, is a buy recommendation based on WH Smith'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. 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) | 33 |
|
24 |
|
23 |
|
29 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 17 |
|
19 |
|
31 |
|
59 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 5 |
|
16 |
|
19 |
|
34 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
62 |
|
70 |
|
65 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 1 |
|
25 |
|
28 |
|
52 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), WH Smith 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 WH Smith. Sales Growth has a rank of 54, which means that, currently, professionals expect the company to grow more than 54% of its competitors. Profit Growth with a rank of 57 is also above average. But Capital Growth has only a rank of 39, and Stock Returns with 40 are also below-average. Stock returns for WH Smith have recently been below 60% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for WH Smith. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. 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 the Obermatt 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 | 11 |
|
56 |
|
59 |
|
54 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 46 |
|
91 |
|
51 |
|
57 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
7 |
|
30 |
|
39 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 63 |
|
57 |
|
44 |
|
40 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 44 |
|
57 |
|
45 |
|
49 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 12 (better than 12% compared with alternatives), the company WH Smith 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 WH Smith 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 WH Smith. Liquidity is at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 24, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 76% of its competitors. Leverage is also high at a rank of 13, which means that the company has an above-average debt-to-equity ratio. It has more debt than 87% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 12 (worse than 88% compared with alternatives), WH Smith has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 58 |
|
12 |
|
15 |
|
13 |
|
| REFINANCING | ||||||||
| REFINANCING | 21 |
|
21 |
|
24 |
|
24 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 11 |
|
16 |
|
60 |
|
55 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
|
6 |
|
23 |
|
12 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
78 |
|
80 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
82 |
|
60 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
16 |
|
86 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
62 |
|
73 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
81 |
|
90 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for WH Smith from December 19, 2024.
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