November 21, 2024
Top 10 Stock Woolworths Holdings Hold 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: Woolworths Holdings – Top 10 Stock in Johannesburg Securities Exchange All Shares Index JSE All Shares
Woolworths Holdings is listed as a top 10 stock on November 21, 2024 in the market index JSE All Shares because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 46 (46% performer), Obermatt assesses an overall hold recommendation for Woolworths Holdings on November 21, 2024.
Snapshot: Obermatt Ranks
| Country | South Africa |
| Industry | Department Stores |
| Index | Good Governace Growth Markets, JSE All Shares |
| 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 Woolworths Holdings Hold
| 360 METRICS | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 36 |
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| SENTIMENT | ||||||||
| SENTIMENT | 71 |
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| 360° VIEW | ||||||||
| 360° VIEW | 46 |
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ANALYSIS: With an Obermatt 360° View of 46 (better than 46% compared with alternatives), overall professional sentiment and financial characteristics for the stock Woolworths Holdings are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Woolworths Holdings. The consolidated Sentiment Rank has a good rank of 71, which means that professional investors are more optimistic about the stock than for 71% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 49, which means that the share price of Woolworths Holdings is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 37, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 37% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 36 which means that the company has a riskier financing structure than 64% 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 46, Woolworths Holdings is worse than 54% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 71) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Woolworths Holdingṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Woolworths Holdings positive
ANALYSIS: With an Obermatt Sentiment Rank of 71 (better than 71% compared with alternatives), overall professional sentiment and engagement for the stock Woolworths Holdings is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Woolworths Holdings. Analyst Opinions are at a rank of 41 (worse than 59% 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 65, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Woolworths Holdings. Even better, the Professional Investors rank is 73, meaning that professional investors hold more stock in this company than in 73% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 71 (more positive than 71% compared with investment alternatives), Woolworths Holdings has a reputation among professional investors that is above-average compared with 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: Woolworths Holdings Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Woolworths Holdings shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Woolworths Holdings. Price-to-Sales (P/S) is 50, which means that the stock price compared with what market professionals expect for future sales is lower than for 50% of comparable companies, indicating a good value concerning Woolworths Holdings's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 51% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 81 (dividends are expected to be higher than 81% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 69% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Woolworths Holdings to 31. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Woolworths Holdings's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Woolworths Holdings Growth Momentum low
| GROWTH METRICS | November 21, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 51 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 47 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 34 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 41 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 37 |
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ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Woolworths Holdings 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 Woolworths Holdings. While Sales Growth ranks at 51, professionals currently expect the company to grow more than 51% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 47, which means that, currently, professionals expect the company to grow its profits less than 53% of its competitors, and Capital Growth has a low rank of 34. Historic stock returns were also below average with a current Stock Returns rank of 41 which means that the stock returns have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Woolworths Holdings Debt Financing Safety below-average
| SAFETY METRICS | November 21, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 21 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 36 |
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ANALYSIS: With an Obermatt Safety Rank of 36 (better than 36% compared with alternatives), the company Woolworths Holdings 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 Woolworths Holdings 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 Woolworths Holdings. 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 34, 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 66% of its competitors. Leverage is also high at a rank of 21, which means that the company has an above-average debt-to-equity ratio. It has more debt than 79% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 36 (worse than 64% compared with alternatives), Woolworths Holdings has a financing structure that is 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. ...read more
Combined financial peformance: Woolworths Holdings Below-Average Financial Performance
| COMBINED PERFORMANCE | November 21, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 30 |
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ANALYSIS: With an Obermatt Combined Rank of 30 (worse than 70% compared with investment alternatives), Woolworths Holdings (Department Stores, South Africa) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Woolworths Holdings are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 36), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 30, is a hold recommendation based on Woolworths Holdings's financial characteristics. As the company Woolworths Holdings's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 49), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 36), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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