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Stock Valuation: Ocado Group Plc (OCDO)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
OCADO GROUP PLC UK/
LSE
Consumer Defensive – Retail – Defensive – Grocery Stores GBP9.04
@ 22 Sep 2018
COMPANY PROFILE Ocado Group PLC is an independent online grocer. The Company’s activities are retailing and distribution of grocery and consumer goods.

Ocado Group PLC is an online grocery retailer, distributing through its Ocado Smart Platform. The company operates under a number of brands such as Ocado, which is the grocery brand used for the shops and own-label products; Sizzle, which is used for Ocado’s kitchen and dining store; and Fetch, which is the pet-store brand. The company’s operating model is built on technology and logistics platforms, rather than physical stores. The company offers a wide range of products via Ocado.com, including food ingredients linked to recipes, alcohol and soft drinks, toiletries, baby, homeware, pet care, and festival products.

Stock Code OCDO
Stock Valuation Below

Ocado Group Price to Sales

The Price to Sales Ratio is a commonly used valuation indicator for a stock. While not as popular as the Price to Earnings Ratio, it overcomes some of the limitations of the PE Ratio in that it can be used even when the company is not making a profit or only making minimal profits. However, it should not be used by itself because a company may be achieving sales but not profits.
At the price of GBP9.04 as at 22 Sep 2018, Ocado Group Plc is trading at a Price to Sales Ratio of 3.5 times last 12 months sales.  This is a 93.0% premium to current fair Price to Sales Ratio of 1.8 times.
Is the stock overvalued? One should not just look at one indicator to determine the fair value of a stock.
ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Company description, historical financial statements data and price data are from gurufocus.com or moneycontrol.com. Estimates are from marketscreener.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

Stock Valuation: Sainsbury (J) Plc (SBRY)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
SAINSBURY (J) PLC UK/
LSE
Consumer Defensive – Retail – Defensive – Grocery Stores GBP3.14
@ 22 Sep 2018
COMPANY PROFILE Sainsbury (J) PLC operates Sainsbury supermarkets in the United Kingdom. It also operates convenience stores, an Internet-based home delivery service, and Sainsbury Bank.

Founded in 1869, J Sainsbury is the second- largest U.K. grocery chain with a 16.5% market share. It operates over 600 supermarkets and nearly 800 convenience stores, all in the U.K., with 90% of sales generated by supermarkets. The company has diversified away from core food by selling clothing, telecom equipment, and other non-food items. In September 2016 it took a step further into non-food retailing with the purchase of Home Retail Group, operating the Habitat and Argos chains, for GBP 1.1 billion. It has operated online sales since 1997.

Stock Code SBRY
Valuation Analysis Below

Sainsbury Price to EBIT

The Price Earnings (PE) Ratio is the most frequently used valuation indicator for a stock. However, there are times when this ratio cannot be used e.g. when the company reports a loss or profit is so minimal that it results in an abnormally high PE Ratio. Or Net Profit After Tax may be volatile and it is better to use Earnings Before Interest and Tax (EBIT) to value the company. We use the PE Band or Price/EBIT Band to show whether a stock is overvalued or undervalued based on its historical valuation.
At the price of GBP3.14 as at 22 Sep 2018, Sainsbury (J) Plc is trading at a Market Cap/EBIT Ratio of 9.7 times last 12 months earnings.  This is a 25.8% premium to its current fair P/EBIT Ratio of 7.7 times. (Price based on the historical average Market Cap/EBIT Ratio of the company is indicated by the red line.)
Is the stock overvalued? One should not just look at one indicator to determine the fair value of a stock.
ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Company description, historical financial statements data and price data are from gurufocus.com or moneycontrol.com. Estimates are from marketscreener.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

Stock Valuation: Spire Healthcare Group Plc (SPI)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
SPIRE HEALTHCARE GROUP PLC UK/
LSE
Healthcare – Health Care Providers – Medical Care GBP1.56
@ 22 Sep 2018
COMPANY PROFILE Spire Healthcare Group PLC owns and operates private hospitals and clinics in the UK and provides a range of private healthcare services. It offers a full range of integrated surgical, medical and diagnostic services.

Spire Healthcare Group PLC provides private healthcare services through a network of hospitals, clinics, and specialty care centers in the United Kingdom. In addition to primary care services, the firm also provides healthcare consulting and diagnostics services. The largest proportion of Spire’s revenue comes from private medical insurance, with the second largest proportion received from the National Health Service (NHS). Orthopedics contributes the largest proportion of revenue of any medical specialty. Patients treated on an inpatient basis contribute the majority of revenue compared with those treated on an outpatient basis.

Stock Code SPI
Stock Valuation Below

Spire Healthcare Group Price to Cash Flow

Price to Cash Flow is an alternative method to value shares. This is because accounting profits can be subject to manipulation. Therefore, some investors prefer to value a company based on cash flows generated by the operating activities of the company. It also acts as a reality check to valuation measures such as Price to Earnings and Price to Sales. If a company generates high profits and sales but not operating cash flows, it could be heading for trouble because it is cash that pays the operating expenses. However, the Price to Cash Flow ratio of most firms are volatile and should not be used in isolation to determine the valuation of the stock.
At the price of GBP1.56 as at 22 Sep 2018, Spire Healthcare Group Plc is trading at a Price to Cash Flow Ratio of 7.2 times last 12 months cash flow.  This is a 12.0% discount to current fair Price to Cash Flow Ratio of 8.2 times.
Is the stock undervalued? One should not just look at one indicator to determine the fair value of a stock.
ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Company description, historical financial statements data and price data are from gurufocus.com or moneycontrol.com. Estimates are from marketscreener.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

Stock Valuation: Anglo American Plc (AAL)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
ANGLO AMERICAN PLC UK/
LSE
Basic Materials – Metals & Mining – Industrial Metals & Minerals GBP16.95
@ 22 Sep 2018
COMPANY PROFILE Anglo American PLC is a global mining corporation with assets including precious, base and bulk commodities. Its core business includes exploration of metals and minerals like platinum, diamonds and coal.

Global mining giant Anglo American’s portfolio spans many commodities and continents. Like fellow large diversified miners, Anglo has significant exposure to copper, coal, and iron ore, but it is unique in its significant platinum output, which accounts for roughly 40% of the annual global supply. Anglo also owns 85% of De Beers, in most years the world’s largest supplier and marketer of rough gem diamonds.

Stock Code AAL
Valuation Analysis Below

Anglo American Price to EBIT

The Price Earnings (PE) Ratio is the most frequently used valuation indicator for a stock. However, there are times when this ratio cannot be used e.g. when the company reports a loss or profit is so minimal that it results in an abnormally high PE Ratio. Or Net Profit After Tax may be volatile and it is better to use Earnings Before Interest and Tax (EBIT) to value the company. We use the PE Band or Price/EBIT Band to show whether a stock is overvalued or undervalued based on its historical valuation.
At the price of GBP16.95 as at 22 Sep 2018, Anglo American Plc is trading at a Market Cap/EBIT Ratio of 4.9 times last 12 months earnings.  This is a 1.9% discount to its current fair P/EBIT Ratio of 5.0 times. (Price based on the historical average Market Cap/EBIT Ratio of the company is indicated by the red line.)
Is the stock overvalued? One should not just look at one indicator to determine the fair value of a stock.
ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Company description, historical financial statements data and price data are from gurufocus.com or moneycontrol.com. Estimates are from marketscreener.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.

 

Stock Valuation: Muthoot Finance Ltd (533398)

Name of Company Country of Origin/ Exchange Traded Sector Stock Price
MUTHOOT FINANCE LTD India/
BOM
Financial Services – Credit Services – Credit Services INR458.35
@ 22 Sep 2018
COMPANY PROFILE Muthoot Finance Ltd is a non-deposit taking, non-banking financial company. It provides personal and business loans to individuals with no access to formal credit typically secured by gold jewelry. The firm also offers some microfinance and housing loans.

Muthoot Finance Ltd is a non-deposit taking, non-banking financial company with thousands of branches in India. The company’s main business is providing personal and business loans primarily to individuals who do not have access to formal credit. The loans are typically secured by gold jewelry. Muthoot also offers some microfinance loans and housing loans to customer segments and areas that are underserved by banks. Interest income accounts for nearly all the company’s revenue. Muthoot has operations in Sri Lanka and India, with India providing almost all the company’s revenue.

Stock Code 533398
Valuation Analysis Below

Muthoot Finance PE

The Price Earnings (PE) Ratio is the most frequently used valuation indicator for a stock. However, there are times when this ratio cannot be used e.g. when the company reports a loss or profit is so minimal that it results in an abnormally high PE Ratio. Or Net Profit After Tax may be volatile and it is better to use Earnings Before Interest and Tax (EBIT) to value the company. We use the PE Band or Market Cap/EBIT Band to show whether a stock is overvalued or undervalued based on its historical valuation.
At the price of INR458.35 as at 22 Sep 2018, Muthoot Finance Ltd is trading at a PE Ratio of 10.0 times last 12 months earnings.  This is a 5.5% discount to current fair Price to Earnings Ratio of 10.6 times. (Price based on the historical average PE of the company is indicated by the red line.)
Is the stock undervalued? One should not just look at one indicator to determine the fair value of a stock.
ProThinker believes in using a combination of valuation methods to decide whether a stock is over or undervalued? The five ratios we use are Price to Earnings, Price to Sales, Price to Cash Flow, Price to Book and Dividend Yield. We use multiple methods to value a stock because each has its benefits as well as shortcomings. Price to Earnings and Price to Cash Flow Ratios relate stock price to profitability but are meaningless when the comany has negative earnings or cash flows. Price to Sales Ratio is more stable because sales are never negative. However, this does not tell us whether the company is able to sell profitably. Price to Book Ratio gives us an indication as to how much we are paying for the company’s assets but it is not directly related to the company’s profitability. Dividend Yield cannot be used for companies that are paying little to no dividends.
While it is important to value stocks based on multiple valuation methods, this often leads to differing views on valuation. One indicator may suggest that a stock is overvalued while another suggest that it is undervalued. This does not help an investor who needs to make a definite decision whether to buy, hold or sell the stock. That is why we advocate the use of a Composite Valuation Indicator, which is derived from the best combination of the five indicators above. A Composite Valuation Indicator will give you ONE conclusion on whether a stock is under or over valued.
To find out more about our valuation methodology, click here. 
Source of Data: Company description, historical financial statements data and price data are from gurufocus.com or moneycontrol.com. Estimates are from marketscreener.com – Thomson Reuters.
Disclaimer: This report is for information purposes only and should not be considered a solicitation to buy or sell any security. Neither ProThinker nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Redistribution is prohibited without the express written consent of ProThinker. Copyright(c) 2018. All rights reserved.