October 26, 2023
Top 10 Stock Signet Jewelers 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: Signet Jewelers – Top 10 Stock in Good Governance in Growth Markets
Signet Jewelers is listed as a top 10 stock on October 26, 2023 in the market index Good Governace Growth Markets because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 68 (high 68% performer), Obermatt assesses an overall buy recommendation for Signet Jewelers on October 26, 2023.
Snapshot: Obermatt Ranks
| Country | Bermuda |
| Industry | Specialty Stores |
| Index | Good Governace Growth Markets |
| 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 Signet Jewelers Buy
| 360 METRICS | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| SENTIMENT | ||||||||
| SENTIMENT | 35 |
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| 360° VIEW | ||||||||
| 360° VIEW | 68 |
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ANALYSIS: With an Obermatt 360° View of 68 (better than 68% compared with alternatives), overall professional sentiment and financial characteristics for the stock Signet Jewelers are above average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Signet Jewelers. The consolidated Growth Rank has a good rank of 55, 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 55% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 100 which means that the company has a financing structure that is safer than 100% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 49 which means that the share price of Signet Jewelers is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 51% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 35, which means that professional investors are more pessimistic about the stock than for 65% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 68, Signet Jewelers is better positioned than 68% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 55), and the company is safely financed (Safety Rank of 100). However, professional market sentiment is low(Sentiment Rank of 35). The negative market view on Signet Jewelers may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Signet Jewelers compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth 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 value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Signet Jewelers only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 35 (better than 35% compared with alternatives), overall professional sentiment and engagement for the stock Signet Jewelers is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Signet Jewelers. Analyst Opinions are at a rank of 13 (worse than 87% 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 means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Signet Jewelers. More encouragingly, the Professional Investors rank is 63, which means that professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 12, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 88% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 35 (less encouraging than 65% compared with investment alternatives), Signet Jewelers has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Signet Jewelers. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Signet Jewelers Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Signet Jewelers shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Signet Jewelers. Price-to-Sales (P/S) is 53, which means that the stock price compared with what market professionals expect for future sales is lower than for 53% of comparable companies, indicating a good value concerning Signet Jewelers's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 79% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 22 (dividends are expected to be higher than for 22% 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 53% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Signet Jewelers to 47. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Signet Jewelers'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 on 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 low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Signet Jewelers Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 55 (better than 55% compared with alternatives), Signet Jewelers 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 Signet Jewelers. Capital Growth has a rank of 86, which means that currently professionals expect the company to grow its invested capital more than 21% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has only a rank of 4, which means that, currently, professionals expect the company to grow less than 96% of its competitors, and Profit Growth is also low at a rank of 21. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 55, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Signet Jewelers, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Signet Jewelers Debt Financing Safety very solid
| SAFETY METRICS | October 26, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 98 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 94 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 100 |
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ANALYSIS: With an Obermatt Safety Rank of 100 (better than 100% compared with alternatives) for 2023, the company Signet Jewelers has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Signet Jewelers 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 all three are above average for Signet Jewelers. Leverage is at 98, meaning the company has a below-average debt-to-equity ratio. It has less debt than 98% of its competitors. Refinancing is at a rank of 81, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. Finally, Liquidity is also good at a rank of 94, which means that the company generates more profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 100 (better than 100% compared with alternatives), Signet Jewelers has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Signet Jewelers Top Financial Performance
| COMBINED PERFORMANCE | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 55 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Signet Jewelers (Specialty Stores, Bermuda) shares have much better financial characteristics than comparable stocks. Shares of Signet Jewelers are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 55) and are safely financed (Safety Rank of 100, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Signet Jewelers's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Signet Jewelers exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 55). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 100) 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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