September 7, 2023
Top 10 Stock Grainger Strong Buy Recommendation

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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 Grainger Strong Buy

360 METRICS	September 7, 2023
VALUE
VALUE	10
GROWTH
GROWTH	73
SAFETY
SAFETY	75
SENTIMENT
SENTIMENT	100
360° VIEW
360° VIEW	83

ANALYSIS: With an Obermatt 360° View of 83 (better than 83% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Grainger are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Grainger. 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 Safety Rank at 75 means that the company has a financing structure that is safer than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 10, meaning that the share price of Grainger is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 90% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 83, Grainger is better positioned than 83% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 73), a safe financing structure (Safety Rank of 75), and positive professional market sentiment (Sentiment Rank of 100), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. 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 more do you pay for the stock of Grainger compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (73% better than peers). The value rank could be the reverse reflection of that (27%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Grainger very positive

SENTIMENT METRICS	September 7, 2023
ANALYST OPINION
ANALYST OPINION	80
OPINIONS CHANGE
OPINIONS CHANGE	65
PRO HOLDINGS
PRO HOLDINGS	98
MARKET PULSE
MARKET PULSE	87
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	100

ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Grainger is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Grainger. Analyst Opinions are at a rank of 80 (better than 80% 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 65, 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 Grainger. The Professional Investors rank is 98, which means that currently, professional investors hold more stock in this company than in 98% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 87 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 87% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Grainger 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 Grainger 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

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Value Strategy: Grainger Stock Price Value low

VALUE METRICS	September 7, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	5
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	19
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	35
DIVIDEND YIELD
DIVIDEND YIELD	45
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	10

ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), Grainger shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Grainger. Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Grainger's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 35, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Grainger. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 55% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on Grainger's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Grainger? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Grainger? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Grainger may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more

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Growth Strategy: Grainger Growth Momentum good

GROWTH METRICS	September 7, 2023
REVENUE GROWTH
REVENUE GROWTH	93
PROFIT GROWTH
PROFIT GROWTH	28
CAPITAL GROWTH
CAPITAL GROWTH	83
STOCK RETURNS
STOCK RETURNS	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	73

ANALYSIS: With an Obermatt Growth Rank of 73 (better than 73% compared with alternatives), Grainger 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 Grainger. Sales Growth has a rank of 93 which means that currently, professionals expect the company to grow more than 93% of its competitors. Capital Growth is also above 28% of competitors with a rank of 83, and Stock Returns with the rank of 57 is also an outperformance. Only Profit Growth is low with a rank of 28 which means that currently, professionals expect the company to grow its profits less than 72% 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. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Grainger is a good growth stock. ...read more

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Safety Strategy: Grainger Debt Financing Safety very solid

SAFETY METRICS	September 7, 2023
LEVERAGE
LEVERAGE	69
REFINANCING
REFINANCING	82
LIQUIDITY
LIQUIDITY	40
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	75

ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2023, the company Grainger has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Grainger 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 two out of three are above average for Grainger.Leverage is at 69, meaning the company has a below-average debt-to-equity ratio. It has less debt than 69% of its competitors.Refinancing is at a rank of 82, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 82% of its competitors. Liquidity is at 40, meaning that the company generates less profit to service its debt than 60% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Grainger has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more

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Combined financial peformance: Grainger Above-Average Financial Performance

COMBINED PERFORMANCE	September 7, 2023
VALUE
VALUE	10
GROWTH
GROWTH	73
SAFETY
SAFETY	40
COMBINED
COMBINED	55

ANALYSIS: With an Obermatt Combined Rank of 55 (better than 55% compared with investment alternatives), Grainger (Real Estate: Operating Services, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Grainger are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives). But they show above-average growth (Growth Rank of 73) and are safely financed (Safety Rank of 75, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 55, is a buy recommendation based on Grainger's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Grainger exhibits low value (Obermatt Value Rank of 10), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 73). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 75) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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