December 7, 2023
Top 10 Stock SMU 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: SMU – Top 10 Stock in Independent Boards in Growth Markets
SMU is listed as a top 10 stock on December 07, 2023 in the market index Independent Boards Growth Markets because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 60 (high 60% performer), Obermatt assesses an overall buy recommendation for SMU on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Food Retail |
| Index | IPSA, Good Governace Growth Markets, Independent Boards Growth Markets |
| 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 SMU Buy
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| SENTIMENT | ||||||||
| SENTIMENT | 91 |
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| 360° VIEW | ||||||||
| 360° VIEW | 60 |
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ANALYSIS: With an Obermatt 360° View of 60 (better than 60% compared with alternatives), overall professional sentiment and financial characteristics for the stock SMU are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for SMU. The consolidated Value Rank has an attractive rank of 87, which means that the share price of SMU is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 87% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 91, which means that professional investors are more optimistic about the stock than for 91% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 17, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 26, meaning the company has a riskier financing structure than 74 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 60, SMU is better positioned than 60% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 87) and positive market sentiment in the professional investor community (Sentiment Rank of 91), but growth expectations are below-average (Growth Rank of 17) and the financing structure is on the risky side(Safety Rank of 26). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of SMU is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for SMU very positive
ANALYSIS: With an Obermatt Sentiment Rank of 91 (better than 91% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock SMU is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for SMU. Analyst Opinions are at a rank of 79 (better than 79% 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 50, 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 SMU. The Professional Investors rank is 71, which means that currently, professional investors hold more stock in this company than in 71% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 82 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 82% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 91 (more positive than 91% compared with investment alternatives), SMU 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 SMU 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: SMU Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2023, SMU shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for SMU. Price-to-Sales is 62 which means that the stock price compared with what market professionals expect for future sales is lower than for 62% of comparable companies, indicating a good value for SMU's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 73% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 66. Compared with other companies in the same industry, dividend yields of SMU are expected to be higher than for 97% of all competitors (a Dividend Yield rank of 97). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on SMU's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in SMU based on its detailed value metrics.
Growth Strategy: SMU Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), SMU 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 SMU. Sales Growth has a below market rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors. The same is valid for Capital Growth, with a rank of 5, and Profit Growth, with a rank of 14. Currently, professionals expect the company to grow its profits less than 86% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 97, which means that the stock returns have recently been above 97% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, 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 SMU, 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: SMU Debt Financing Safety below-average
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 13 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 45 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 26 |
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ANALYSIS: With an Obermatt Safety Rank of 26 (better than 26% compared with alternatives), the company SMU 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 SMU 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 all three metrics below average for SMU. Liquidity is at 45, meaning that the company generates less profit to service its debt than 55% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 34, meaning the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. Finally, Refinancing is at a rank of 13 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 87% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 26 (worse than 74% compared with alternatives), SMU has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: SMU Below-Average Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 87 |
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| GROWTH | ||||||||
| GROWTH | 17 |
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| SAFETY | ||||||||
| SAFETY | 45 |
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| COMBINED | ||||||||
| COMBINED | 38 |
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ANALYSIS: With an Obermatt Combined Rank of 38 (worse than 62% compared with investment alternatives), SMU (Food Retail, Chile) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of SMU are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 26), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 38, is a hold recommendation based on SMU's financial characteristics. As the company SMU's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 26), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 87% of comparable companies, may indicate 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. ...read more
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