August 3, 2023
Top 10 Stock J.M. Smucker 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: J.M. Smucker – Top 10 Stock in S&P 500 Consumer Staples Index
J.M. Smucker is listed as a top 10 stock on August 03, 2023 in the market index S&P US Consumer because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for J.M. Smucker on August 03, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Packaged Foods & Meats |
| Index | S&P US Consumer, S&P US Food & Beverage, S&P 500 |
| 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 J.M. Smucker Hold
| 360 METRICS | August 3, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| SENTIMENT | ||||||||
| SENTIMENT | 37 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock J.M. Smucker are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for J.M. Smucker. The consolidated Value Rank has an attractive rank of 73, which means that the share price of J.M. Smucker 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 73% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 57. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 37. Professional investors are more confident in 63% other stocks. The consolidated Growth Rank also has a low rank of 15, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 85 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, J.M. Smucker is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 73), and the financing structure is on the safer side (Safety Rank of 57). However, sentiment in the professional investor community is below-average (Sentiment Rank of 37), as is the growth momentum for the company (Growth Rank of 15). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for J.M. Smucker only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock J.M. Smucker is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for J.M. Smucker. Analyst Opinions are at a rank of 15 (worse than 85% 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 J.M. Smucker. Even better, the Professional Investors rank is 65, meaning that professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 64, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 64% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 37 (less encouraging than 63% compared with investment alternatives), J.M. Smucker has a reputation among professional investors that is below 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: J.M. Smucker Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), J.M. Smucker shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for J.M. Smucker. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 72 which means that the stock price compared with what market professionals expect for future profits is lower than for 72% of comparable companies, indicating a good value concerning J.M. Smucker's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 70, and for Dividend Yield with a Dividend Yield Rank of 77. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 61% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 39). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a buy recommendation based on J.M. Smucker's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that J.M. Smucker has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing J.M. Smucker shares. ...read more
Growth Strategy: J.M. Smucker Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 15 (better than 15% compared with alternatives), J.M. Smucker shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for J.M. Smucker. Sales Growth has a below market rank of 14, which means that, currently, professionals expect the company to grow less than 86% of its competitors. The same is valid for Capital Growth, with a rank of 14, and Profit Growth, with a rank of 36. Currently, professionals expect the company to grow its profits less than 64% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 71, which means that the stock returns have recently been above 71% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 15, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for J.M. Smucker, 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: J.M. Smucker Debt Financing Safety above-average
| SAFETY METRICS | August 3, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 56 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 50 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 57 |
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ANALYSIS: With an Obermatt Safety Rank of 57 (better than 57% compared with alternatives), the company J.M. Smucker 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 J.M. Smucker 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 J.M. Smucker. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 50, meaning the company generates more profit to service its debt than 50% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 47, 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 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 57 (better than 57% compared with alternatives), J.M. Smucker has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for J.M. Smucker. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: J.M. Smucker Below-Average Financial Performance
| COMBINED PERFORMANCE | August 3, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 15 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| COMBINED | ||||||||
| COMBINED | 45 |
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ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), J.M. Smucker (Packaged Foods & Meats, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of J.M. Smucker are a good value (attractively priced) with a consolidated Value Rank of 73 (better than 73% of alternatives), are safely financed (Safety Rank of 57, which means low debt burdens), but show below-average growth (Growth Rank of 15). ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on J.M. Smucker's financial characteristics. As the company J.M. Smucker's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 15) while being safely financed (Obermatt Safety Rank of 57), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 73% 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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