November 2, 2023
Top 10 Stock Sonae 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: Sonae – Top 10 Stock in PSI-20 Index
Sonae is listed as a top 10 stock on November 02, 2023 in the market index PSI 20 because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low. Based on the Obermatt 360° View of 96 (top 96% performer), Obermatt assesses an overall strong buy recommendation for Sonae on November 02, 2023.
Snapshot: Obermatt Ranks
| Country | Portugal |
| Industry | Food Retail |
| Index | Dividends Europe, Low Waste, Recycling, PSI General, PSI 20 |
| 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 Sonae Strong Buy
| 360 METRICS | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 96 |
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ANALYSIS: With an Obermatt 360° View of 96 (better than 96% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Sonae are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Sonae. The consolidated Value Rank has an attractive rank of 94, which means that the share price of Sonae 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 94% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 89, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. But the company’s financing is risky with a Safety rank of 20. This means 80% of comparable companies have a safer financing structure than Sonae. ...read more
RECOMMENDATION: With a consolidated 360° View of 96, Sonae is better positioned than 96% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 94), above-average growth (Growth Rank of 89), and positive market sentiment in the professional investor community (Sentiment Rank of 86), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 20), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Sonae is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Sonae very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Sonae is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Sonae. Analyst Opinions are at a rank of 91 (better than 91% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 74, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Sonae. Finally, the Professional Investors rank is 90, which means that currently, professional investors hold more stock in this company than in 90% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Sonae has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 25, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 75% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Sonae is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Sonae Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 94 (better than 94% compared with alternatives) for 2023, Sonae shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Sonae. Price-to-Sales is 61 which means that the stock price compared with what market professionals expect for future sales is lower than for 61% of comparable companies, indicating a good value for Sonae's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 83% 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 64. Compared with other companies in the same industry, dividend yields of Sonae are expected to be higher than for 92% of all competitors (a Dividend Yield rank of 92). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 94, is a buy recommendation based on Sonae'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 Sonae based on its detailed value metrics.
Growth Strategy: Sonae Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2023, Sonae shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Sonae. Sales Growth has a value of 85, which means that, currently, professionals expect the company to grow more than 85% of its competitors. The same is valid for Profit Growth with a value of 69 and for Capital Growth with 93. In addition, Stock Returns had an above-average rank value of 59, which means they have been higher than 59% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 89, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Sonae exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Sonae Debt Financing Safety risky
| SAFETY METRICS | November 2, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company Sonae has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Sonae 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 Sonae and the other two below average. Leverage is at a rank of 58 meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors.Refinancing is at a rank of 17, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 83% of its competitors. Liquidity is at a rank of 26, meaning that the company generates less profit to service its debt than 74% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), Sonae has a financing structure that is significantly 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 Sonae are on the safer side. ...read more
Combined financial peformance: Sonae Top Financial Performance
| COMBINED PERFORMANCE | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 94 |
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| GROWTH | ||||||||
| GROWTH | 89 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| COMBINED | ||||||||
| COMBINED | 98 |
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ANALYSIS: With an Obermatt Combined Rank of 98 (better than 98% compared with investment alternatives), Sonae (Food Retail, Portugal) shares have much better financial characteristics than comparable stocks. Shares of Sonae are a good value (attractively priced) with a consolidated Value Rank of 94 (better than 94% of alternatives), show above-average growth (Growth Rank of 89) but are riskily financed (Safety Rank of 20), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on Sonae's financial characteristics. As the company Sonae's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 94) and above-average growth (Obermatt Growth Rank of 89), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 20) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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