November 23, 2023
Top 10 Stock Premier Foods 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: Premier Foods – Top 10 Stock in FTSE All Share Index
Premier Foods is listed as a top 10 stock on November 23, 2023 in the market index FTSE All Shares because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Premier Foods on November 23, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Packaged Foods & Meats |
| Index | FTSE All Shares, FTSE 250, FTSE 350 |
| 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 Premier Foods Strong Buy
| 360 METRICS | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 50 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Premier Foods are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Premier Foods. The consolidated Growth Rank has a good rank of 50, 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 50% of competitors in the same industry. The consolidated Sentiment Rank also 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 has a less desirable rank of 48, which means that the share price of Premier Foods is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 52% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 49, which means that the company has a financing structure that is riskier than those of 51% 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 78, Premier Foods is better positioned than 78% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 50), and professional market sentiment is positive (Sentiment Rank of 100), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. 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 do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Premier Foods very positive
| SENTIMENT METRICS | November 23, 2023 | |||||||
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| ANALYST OPINION | ||||||||
| ANALYST OPINION | 100 |
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| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | 94 |
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| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | 100 |
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| MARKET PULSE | ||||||||
| MARKET PULSE | 72 |
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| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | 100 |
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ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Premier Foods is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Premier Foods. Analyst Opinions are at a rank of 100 (better than 100% 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 94, 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 Premier Foods. The Professional Investors rank is 100, which means that currently, professional investors hold more stock in this company than in 100% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 72 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 72% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Premier Foods 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 Premier Foods 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
Value Strategy: Premier Foods Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Premier Foods shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Premier Foods. Price-to-Profit (also referred to as price-earnings, P/E) is 70 which means that the stock price compared with what market professionals expect for future profits is lower than for 70% of comparable companies, indicating a good value concerning Premier Foods'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 76, which means that the stock price is lower as regards to invested capital than for 76% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 67% of alternatives (only 33% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 87% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Premier Foods'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 concerning expected revenues, 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 Group or 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 distribute it to shareholders through dividends, 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: Premier Foods Growth Momentum good
| GROWTH METRICS | November 23, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 74 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 34 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 18 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 72 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 50 |
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ANALYSIS: With an Obermatt Growth Rank of 50 (better than 50% compared with alternatives), Premier Foods 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 half of the indicators below and half above average for Premier Foods. Sales Growth has a rank of 74 which means that currently professionals expect the company to grow more than 74% of its competitors. Stock Returns are also above average with a rank of 72. But Capital Growth has only a rank of 18, which means that currently professionals expect the company to grow its invested capital less than 82% of its competitors. Profit Growth is also low, with a rank of only 34, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 50, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 72% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Premier Foods Debt Financing Safety below-average
| SAFETY METRICS | November 23, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 91 |
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| REFINANCING | ||||||||
| REFINANCING | 22 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 39 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Premier Foods 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 Premier Foods 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 Premier Foods and the other two below average. Leverage is at a rank of 91 meaning the company has a below-average debt-to-equity ratio. It has less debt than 91% of its competitors.Refinancing is at a rank of 22, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 78% of its competitors. Liquidity is at a rank of 39, meaning that the company generates less profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), Premier Foods has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Premier Foods are on the safer side. ...read more
Combined financial peformance: Premier Foods Below-Average Financial Performance
| COMBINED PERFORMANCE | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 50 |
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| SAFETY | ||||||||
| SAFETY | 39 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), Premier Foods (Packaged Foods & Meats, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Premier Foods are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 50). ...read more
RECOMMENDATION: A Combined Rank of 49, is a hold recommendation based on Premier Foods's financial characteristics. As the company Premier Foods shows low value with an Obermatt Value Rank of 48 (52% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 50% of comparable companies (Obermatt Growth Rank is 50). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Premier Foods, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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