Data as of Market Close: 29 June 2020

Will Puregold Price Club Inc Deliver Long-Term Returns?

Summary Due Diligence Report Rating: Above average Price target: 47.484 Recommendation: Strong buy

Ticker Company Name Exchange Industry Sector

PGOLD Puregold Price Club Inc Philippine Stock Exchange, Food Retail & Distribution Consumer Non-Cyclicals

StockMarks Ratings Highlights

Prospect
Puregold Price Club Inc has a fair prospect, with an overall
score of 84/100. Its business rating is good due to a good
revenue stream, good asset conversion and the right
leverage. Puregold Price Club Inc's management is rated
as efficient and has improved in the last quarter. Its
average quality financials are the result of an average
financial position, satisfactory performance and strong
cash generation efficiency. Puregold Price Club Inc's
relatively attractive valuation is due to high price
attractiveness and low market multiples.
Overall, the company is rated as very safe. With low
operational risk, it has little information risk and small
market risk. The current sentiment in relation to Puregold
Price Club Inc is bullish with a negative outlook. The
company's business forecast is positive based on an
Quality Safety Sentiment improving trend in our estimates. To conclude, we believe
Puregold Price Club Inc to be an above average long-term
SMQ SMD SMC investment that is not sure to deliver long-term returns.

Last Close Price 52-Week Range Market Cap.

Business Operational Technicals 45.000 PHP 26.00 - 50.00 129.790B

SMB SMD1 SMS Beta PE PBV

0.37 - 2.03

EPS Earnings Yield Div Announc. Date

- 4.62% -

Financials Information Outlook DPS Dividend Yield Div Ex Date

SMF SMD2 SMA - 0.00% -

Contents
1. Business and Management ...................................... 2
Earnings Market Valuation 2. Benchmarking and Parities ...................................... 4
SMI SMD3 SMW 3. Financials and Valuation .......................................... 6
4. Safety and Sentiment ............................................... 8
5. Estimates and Recommendations ........................... 10
The gauge's thin indicator represents the values in the previous report.
Summary StockMarks Ratings for Puregold Price Club Inc were calculated in relation to the entire population of 230 Philippines-listed companies rated
today, using a scale from 0 (worst) to 100 (best). For an explanation of each rating, see page 12. Readers should check for the latest news and events
not yet reflected in the company financials.

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The business C1.SADIF sector and industry stock price indexes

Its business is rated as good due to a
good revenue stream, good asset
conversion and the right leverage. The
company operates in the Food Retail &
Distribution industry - where stock prices
are rising in line with the overall
Consumer Non-Cyclicals sector.
The Industry
The stock prices in the Food Retail &
Distribution industry, whose average price
index is shown in chart C1, have been
rising over the past quarter. Likewise, the
Consumer Non-Cyclicals sector has
followed a rising path.
T1. Benchmark Group: Industry Competitors
The Company
Industry
Puregold Price Club, Inc. is a Philippines- Ticker Company Name Similarity SMB SMB1 SMB2 SMB3
Share
based company engaged in the business
PGOLD Puregold Price Club Inc N/A 96 77 96 88
of trading goods, such as consumer
products (canned goods, housewares, RRHI Robinsons Retail 91.30% 18.69% 96 75 97 93
Holdings Inc
toiletries, dry goods, and food products,
among others) on a wholesale and retail SEVN Philippine Seven Corp 91.30% 5.56% 93 83 100 60
basis. The Company operates in retailing SM SM Investments Corp 69.57% 56.84% 48 50 77 19
business segment. The Company
conducts its operations through a Puregold Price Club Inc has a good revenue rating (SMB1 = 77/100) with
hypermarket known as Puregold Price revenue well above its breakeven point. The company's revenue has too
Club, which offers a range of food and much volatility and is growing while its first competitor is stable.
non-food products, and caters to both
retail customers and resellers. The In terms of cash conversion (SMB2 = 96/100), the company has a good
rating due to its short net operating cycle, good asset turnover and median
Company has a supermarket chain known
operating margins.
as Puregold Junior, which is operated by
its subsidiary Puregold Junior
Supermarket, Inc. Its Puregold Extra is the Finally, Puregold Price Club Inc is well leveraged (SMB3 = 88/100),
small store format, which offers a range of especially when assessed by its debt capacity.
goods, comprising the Company's stock C2. The trend in the Business Stockmark and its determinants
keeping units (SKUs) ranging from 3,000
to 5,000. It operates through stores in
various locations. Its store provides
products that range from groceries,
apparel, household accessories and
furniture. It has approximately 280
operating stores and over 20 food service
stalls.
Business rating and competitors
The Summary Business StockMarks
Rating (SMB = 96/100) for Puregold Price
Club Inc is significantly above the sector
average and above its top 3 ranked
competitors in terms of business similarity
as listed in table T1. The SMB trend is
depicted in chart C2. Its recent rise was
primarily due to growth in the company's
revenue rating.

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Management C3. Ownership evolution

Puregold Price Club Inc's management is
rated as efficient and has improved in the
last quarter. The company trades with a
float of 33.30%, which has been stable in
the last quarter. The company's earnings
quality is rated as average.

Ownership
In terms of ownership, Puregold Price Club
Inc is in the capitalist sector category,
because it operates in an unregulated
sector, has a float of 33.30% and its top 5
shareholders own 65.52%.The major
shareholder, Cosco Capital Inc, owns
48.92% of the company. Comparing the management efficiency of Puregold Price Club Inc with that
Among its top 10 investors, BlackRock of its closest competitor, Robinsons Retail Holdings Inc, shows that Puregold
Institutional Trust Company, N.A. bought Price Club Inc's rating is 49.3% higher.
10.139 million shares and Samsung Asset
Management (Hong Kong) Limited sold In general, the assessment of the management efficiency trend needs to be
qualified by taking into account how long the incumbent management has
770000 shares in the past half year.
been in place as it takes a few quarters before the impact is shown in the
As shown in chart C3, in the last quarter,
company financials. Sometimes, a small temporary decline or rise may not
institutional investors increased their
be attributed to a change in efficiency but is instead the result of large shifts
ownership to 11.6%, while insiders
in investment / disinvestment. Despite the importance of management
reduced their holdings at 66.7%.
efficiency, investors should not neglect other more subjective factors such as
management integrity and business savvy, which are beyond the scope of
Governance this report.
Due to lack of data it is not possible to C4. The trend in the Management StockMarks Determinants
present a complete rating for governance.
However, a partial assessment can be
made through Puregold Price Club Inc's
earnings quality rating (SMI = 58/100).
With an earnings quality in the mid range,
the company may be relatively safe in
relation to governance risk with a positive
trend in the last quarter.
Management
Puregold Price Club Inc currently has an
efficient management with a Management
StockMark (SMM) of 75/100, the lowest of
its quality sub-ratings.
Chart C4 shows that its recent rise was
driven by a matching change in the
earnings per employee.

For a descriptive classification of management efficiency, we use the following five categories:
Category First Class Efficient Passable Mediocre Inefficient

SMM Rating 85-100 60-84 40-59 20-39 0-19

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Benchmarking T2. Benchmark Group: Competitors

In terms of overall business quality, Industry
Ticker Company Name Similarity SMQ SMB SMF SMI
Puregold Price Club Inc ranks sixth Share
amongst its competitors in the Food PGOLD Puregold Price Club Inc N/A 72 96 53 58
Retail & Distribution industry. Its strongest RRHI Robinsons Retail 91.30% 18.69% 84 96 65 20
position is in terms of business. In relation Holdings Inc
to performance, its best driver is the SEVN Philippine Seven Corp 91.30% 5.56% 99 93 87 93
return rating, which stabilized in the past SM SM Investments Corp 69.57% 56.84% 79 48 73 58
quarter.
COSCO Cosco Capital Inc 69.57% 18.91% 75 71 68 37
Comparables EMP Emperador Inc 56.52% N/A 86 84 72 56
Although no two companies are exactly Chart C5 below depicts a detailed comparison of the determinants of each
alike, it is useful to define a benchmark quality rating. It can be observed that Puregold Price Club Inc outperforms
group of comparable companies. The its closest competitor in terms of liquidity (SMF4 = 88/100).
group's selection may be based on
clientele, business model, price C5. Competitor Analysis based on Quality drivers
correlation, technology, location or any
other criteria. Since most companies
operate via various lines of business,
selecting on the basis of a single criteria is
controversial and analysts often prefer a
comparison with an industry or sector
average. Yet, for multi-industry firms, to
use the industry of registration is equally
questionable.
Instead, we opted for a broader set
comprising of all companies trading in the
same stock exchange. This is inadequate
for companies whose most direct
competitor is a foreign company. Equally
Moreover, the comparison of performance and its drivers, depicted in chart
controversial is the choice of indicators to
C6, shows that Puregold Price Club Inc is less profitable than its closest
be compared.
competitor. In terms of its performance (SMF12) determinants the company
Nevertheless, although we rate Puregold
is in a bad position with regard to the distribution to shareholders, high
Price Club Inc against the entire market, it
returns and it seems excessively valued by the market.
is important to compare the company to a
peer group - that we call competitors - in C6. Competitor Analysis based on Performance Drivers
relation to the drivers of business quality
and performance (see table T2 and chart
C6).
Competitors
The company's closest competitor,
Robinsons Retail Holdings Inc, has a
similarity index of 91.30%(see table T2).
This similarity index is enough to consider
this competitor fully relevant for
comparable analysis.
From table T2 we see that, when analyzed
from an investor perspective, the company
fares poorly in relation to its top
competitor. Its best rating is for business
(SMB = 96/100) while its lowest is for
financials (SMF = 53/100).

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Parities T3. Benchmark Group: Correlated Pairs

Compared to its most correlated pairs, Ticker Company Name Similarity SMC SMW SMS SMA
Puregold Price Club Inc ranks first in
terms of business sentiment. It is PGOLD Puregold Price Club Inc 72 76 12 91
undervalued relative to its closest pair, GLO Globe Telecom Inc 58.14% 20 77 3 39
with a fair value exchange rate above the
MER Manila Electric Co 58.14% 13 60 7 24
nominal exchange rate and a trend
towards appreciation. PNX Phoenix Petroleum 58.14% 35 63 17 51
Philippines Inc
Currently, Globe Telecom Inc is the EMP Emperador Inc 53.49% 39 72 11 55
closest stock for pair trading with a RRHI Robinsons Retail Holdings Inc 51.16% 61 59 16 90
similarity index of 58.14%, defined on the
basis of market correlation, sector and The rates quoted in chart C7 give us the number of benchmarked shares
trading volumes (see Table 3). that we could buy with one share of Puregold Price Club Inc. Therefore, an
In comparison to its highest correlated increase/decrease in the rate of exchange means that its price is
stocks (for pair trading), Puregold Price appreciating/depreciating relative to its pair. The trend in the fair value
Club Inc's best rank is the outlook rating exchange rate is relevant not only to adjust valuations but also to assess the
(SMA) and the investor sentiment rating price outlook for the stock price. SADIF clients may access the company's
(SMC), where it ranks first. fair value in relation to any other company at http://sadifanalytics.com.
Market vs. Fair Value Parities
Warren Buffett popularized the idea that Chart C8 also shows the parity index and the evolution of the fair value
many air-for-assets risky acquisitions take exchange rate for Puregold Price Club Inc, in relation to its first pair, Globe
place during bull markets because Telecom Inc.
overvalued acquirers can afford to overpay
because they are, in effect, using stock as We can observe that in relation to the first pair, the trend in its fair value
if it were counterfeit money. during the last quarter has been towards appreciation. In turn, in the last
But, unfortunately, the estimation of month the parity index shows a rise reflecting an appreciation in relation to
intrinsic values is a very challenging task. its pair.
C8. Prices, parity indexes and fair value
Yet, we may minimize the problem and
bypass the need to estimate intrinsic
values by adjusting the nominal stock
exchange rates with our Price
Attractiveness StockMark (SMP), which
estimates the degree of
over/undervaluation at any level of market
premium or discount.
By adjusting the nominal rates by the
relative SMPs we obtain the fair value
exchange rates depicted in chart C7.
C7. Fair value exchange rates
In general, pair trading requires degrees of similarity above 70% and the
success of pair trading strategies depends on the investor’s ability to
forecast the duration of the convergence path.

However, convergence itself may only happen if the two companies are not
diverging in a fundamental way. Investors can evaluate this possibility by
comparing the StockMarks sentiment ratings shown in the table T3. It shows
that Puregold Price Club Inc's sentiment is significantly above that of Globe
Telecom Inc, mostly due to a difference in the technicals rating (SMS).

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Financials C9. The trend in the Financial rating and its determinants
The company's average quality financials
are the result of an average financial
position, satisfactory performance and
strong cash generation efficiency. The
recent trend shows a declining evolution
mainly due to a deterioration in the rating
of their financial performance. The table
below shows some of Puregold Price
Club Inc's key ratios.

T4. Ratios PGOLD RRHI SEVN Food Retail & Distribution

Revenue
Revenue Growth (Quarterly) 4.23% 4.54% 5.08% 1.92%
Revenue Volatility (Quarterly) 2.55 3.06 2.51 4.58
Sales Elasticity Relative to Industry 1.03 1.22 1.50 0.73
Margins
EBITDA Margin 9.87% 10.14% 11.68% 4.57%
Operating Margin 7.36% 6.04% 3.37% 2.42%
Asset Turnover 1.53 1.24 1.58 1.90
Cash Conversion
Operating Cycle (Days) 109 64.77 63.33 67
Net Operating Cycle (Days) 80 28.45 9.15 14
Average Days Receivables & Other * 13.19 14.29 18.80 22.94
Leverage
Breakeven Revenue 0.22 0.80 0.93 0.87
Degree of Operational Leverage 1.06 2.66 5.94 3.11
Degree of Financial Leverage 1.21 1.87 2.49 1.00
Efficiency
ROA 5.89% 3.10% 4.84% 2.23%
ROE 9.92% 5.52% 17.64% 6.69%
Equity Growth 3.31% 0.85% 1.29% 0.84%
Liquidity and Solvency
Cash Ratio 1.25 0.58 0.41 0.22
Current Ratio 2.94 1.35 0.85 0.88
Interest Service Coverage 6.30 3.27 5.57 10.30
Capitalization 0.59 0.56 0.27 0.34
Earnings and Distributions
Earnings Yield 4.62% 3.44% 1.40% 3.76%
Dividend Payout 17.60% 32.26% 22.61% 38.65%
Buyback Payout 0.00% 1.03% 0.00% 0.00%
Valuations per Share
Price to book value 2.03 1.39 11.69 1.39
Price to sales 0.85 0.61 1.93 0.32
Enterprise value/EBITDA 29.53 24.77 74.78 24.58

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Valuation C11. Synthetic Multiple (SMK) and its determinants

Puregold Price Club Inc's relatively
attractive valuation is due to high price
attractiveness and low market multiples.
The company is currently trading at 2.0
times book value, which compares
favourably with the industry average. In
the past quarter, the valuation has
improved due to a rise in the price
attractiveness rating (SMP).
Multiples
The traditional valuation of companies
based on market price multiples depicted
in chart C10 shows that Puregold Price However, investors should not focus exclusively on trends in market price
Club Inc has remained stable in the last multiples and earnings yields. They need to consider the most recent
quarter. However, because the various absolute value of the SMP and its trend (depicted in chart C12) for two main
multiples are based on different metrics,
reasons.
we standardize and combine them into a
Firstly, to verify if the stock is caught at a stationary level, indicating that it
synthetic multiple (SMK) depicted in chart may remain undervalued or overvalued for long periods.
C11. Secondly, investors should assess if it is diverging or converging in relation
C10. Trend in valuation multiples to a fair valuation (SMP between 45-55).

Chart C12 shows the overall valuation rating (SMW = 76/100) and its
determinants. Overall, we observe that Puregold Price Club Inc has an
attractive valuation with a tendency towards reinforcement.
C12. The trend in valuation (SMW) and its determinants

The trend in our synthetic multiple (SMK =

38/100), shown in chart C11, is positive,
due mostly to a rise in the sales multiple.

Price Attractiveness
Despite the recent steep rise in Puregold In terms of the SMW determinants it is worth noting that the company's main
Price Club Inc share price, the possibilitydriver is price attractiveness (SMP) and its weakest is the synthetic multiple
of the company's shares being overbought (SMK).
remains low. The nominal stock exchange rate between two stocks as given by current
market prices (shown previously in page 5, chart C7) may be misleading if
Puregold Price Club Inc currently has a markets, as they often do, over-estimate or underestimate the
Price StockMark (SMP) of 91/100, premium/discount relative to intrinsic value.
indicating that the market is undervaluing The valuation of stock-for-stock offers in M&A transactions is quite complex
the company's long-term fundamentals. when shareholders of the acquirer and the target company hold significantly
different views on the intrinsic value of their companies. So, since the
divergence in relation to the nominal rate is significant, the fair value
exchange rate is a good aide in such discussions.

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Safety Financial Strength C14. Financial strength

The company is rated as very safe. With The breakdown of financial
l o w o p e r a t i o n a l r i s k , i t h a s l i t t l e strength (SMF11 = 42/100) -
information risk and and small market see chart on the right - shows
risk. The trend in its determinants shows significant risk of insolvency, a
a significant reduction in operational risk high rating in terms of liquidity
over the past quarter. The market risk, in and a minor risk of default.
terms of volatility, is significantly higher The recent trend shows a
than the market index ETF in the last worsening situation in the last
quarter. quarter. The main contributor for
this deterioration was solvency,
As shown in chart C13, Puregold Price which declined by 15.0%.
Club Inc has a high level of safety (SMD =
100/100) which has remained stable in the Informational Safety
past quarter. Its weakest rating is in terms Puregold Price Club Inc's classification in
of information safety. Information Earn.
terms of informational safety is the result of
C13. Safety and its determinants average earnings quality combined with
good data availability and passable
reliability.
This classification does not include Availability Reliability
transparency, integrity and regulatory risks,
which may vary due to Puregold Price Club
Inc's rating for governance.

Operational Safety
The determinants of the sales and
operational risk depicted in the box below,
are the result of high revenue performance
combined with adequate leverage in a
company with ordinary financial strength.
Puregold Price Club Inc's strong revenue
performance is due to a combination of C15. Volatility compared to market ETF
moderate revenue growth, large volatility
and average competitiveness in relation to
its industry.
Operational Revenue
Market Safety
The market risk (see box on the right) has Market Volatility
three components: volatility risk, delisting
risk and takeover exposure. When
compared to its closest competitor in terms
of similarity, Puregold Price Club Inc is 1.13
times less riskier than Robinsons Retail Continuatio Takeover
Holdings Inc. The main difference is a
higher takeover rating. Puregold Price Club
Inc's volatity compared to the market index
ETF, shown below, is high with a
cumulative frequency of negative returns
6.1 % points above the ETF.

Leverage Financial

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Sentiment C16. Overall Investor Sentiment (SMC) and its constituents

The current investor sentiment in relation
to Puregold Price Club Inc is bullish, but
with a negative outlook. It may change
abruptly by some unknown forthcoming
corporate action or event. Meanwhile, the
short term trend measured through
technical indicators shows some
worsening in the last month.

The current sentiment (SMC = 72/100) in

relation to Puregold Price Club Inc is
assessed on the basis of its current
valuation and forecasts, complemented by
technical indicators. Its evolution depicted
C17. Technical Analysis Sentiment (SMS) and its constituents
in chart C16, shows a declining trend,
mainly as a result of a deterioration in the
technicals rating (SMS).
Valuation
The valuation sentiment (SMW = 76/100)
is positive, weakened by a combination of
low multiples, attractive price and a
significant outperformance likelihood (see
chart C12, page 7).
Technicals
The outlook in terms of technical analysis
(chart C17), price targets and market trend C18. Outperformance (SMO) and Fair Value exchange indexes
shows a negative trend in the last quarter.
This is reinforced by a stationary trend in
recent SADIF estimates and it is supported
by a rising valuation
Outperformance likelihood
When compared to its closest competitor,
Robinsons Retail Holdings Inc, Puregold
Price Club Inc exhibits greater
undervaluation and is equally likely to
outperform the market in the long term.
Finally, an important complement to gauge
investor sentiment is given below through
the list of recent major buyers and sellers.
Major Buyers Major Sellers
Investor Name Shares Investor Name Shares
BlackRock Institutional Trust Company, N.A. +10.14M Norges Bank Investment Management (NBIM) -59.36M
APG Asset Management N.V. +7.78M Artisan Partners Limited Partnership -20.70M
CI Investments Inc. +4.92M Matthews International Capital Management, -4.34M
PGGM Vermogensbeheer B.V. +4.11M Templeton Asset Management Ltd. -2.96M
Caisse de Depot et Placement du Quebec +3.21M Allianz Global Investors Asia Pacific Limited -1.31M

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Estimates C19. SADIF and Sell Side consensus estimates vs historical EPS
The company's business outlook is
positive and, based on an improving trend
in our estimates, is likely to improve.
Earnings per share is strengthening,
while its book value per share is rising.
The impact on market multiples is
favorable. Our target price has an implicit
annual CAGR of 5.5%, well below that of
the analyst consensus.
Overall, our rating for business outlook Book Value
(SMA = 91/100) has improved in the last
The stock is trading at 2.0 times book value, with a rising trend.
quarter due mostly to an improvement in
The trend in Puregold Price Club Inc's market and book values, allow
the financial estimates (see chart C16,
investors to gauge how the market values the company's growth. Comparing
page 9).
the two most recent quarters with the previous two, we see that book values
Revenue have increased by 4.7% while the company's market value has decreased
Puregold Price Club Inc is currently by 4.83%. Moreover, the gap between the two narrowed in the last month.
earning 4.3% on revenue of 40,997.7
million. T7. Quarterly BVS
T5. Quarterly Revenue Per Share Year Q1 Q2 Q3 Q4
Year Q1 Q2 Q3 Q4 2020 22.185 22.939f 23.425f -

2020 14.286 15.216f 16.207f - 2019 19.376 20.645 21.000 21.430

2019 14.872 12.304 12.751 13.470 2018 16.856 17.859 17.895 18.838

2018 12.935 11.165 11.589 12.773 Price Targets

This revenue translates into an earnings We use the estimates above and the outperformance likelihood rating (SMO)
yield of 4.62% and a return on equity of to derive Puregold Price Club Inc's price target. We do not take a view on
9.9% over the last twelve months. The the market direction. Investors expecting the market to rise (or fall)
corresponding EPS trend can be seen in significantly should increase (decrease) the price target accordingly.
table T6.
Chart C20 shows that we expect the stock price to appreciate by 2.484 in
Earnings absolute terms to reach 47.484. And, in relation to its current level (45.000),
Over the last two quarters available, we estimate a potential gain of 5.5% over the coming year. The
Puregold Price Club Inc's earnings per corresponding CAGR value of the analyst consensus is higher at
share improved to 0.614. As shown in 20.85%.The lower and upper bounds shown suggest good price target
table T6, this represents a deterioration in C20. Price Targets
relation to its earnings one year ago.

Our estimation, shown in table T6, is that

quarterly earnings may rise to 0.801 during
the coming semester. Our estimate is 0.46
above the current consensus estimate.

T6. Quarterly EPS

Year Q1 Q2 Q3 Q4
2020 0.614 0.724f 0.801f -
2019 0.688 0.533 0.462 0.600
2018 0.682 0.488 0.569 0.520

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Recommendations C21. SADIF overall Rating (SMR) and its drivers

Puregold Price Club Inc rates as an
above average investment. Compared to
the analyst consensus, our
recommendation is more favorable.The
comparison with its closest competitor
also shows a similar rating. The main
contributor to this rating is its current
safety.
The current SMR rating is 84/100. Chart
C22 shows the SMR trend compared to
the sell side recommendation values its closest rated-competitor, Robinsons Retail Holdings Inc, has been
depicted with the half-year lead time. appreciating over the past 2 weeks. When compared to its closest
Our last SMR revision was downward, and competitor, Robinsons Retail Holdings Inc, Puregold Price Club Inc shows
the month-to-month trend is negative. greater undervaluation and is equally likely to outperform the market.
The company's share price has been stable over the past year, but we
T8. History of up(down)grades *
believe underlying fundamentals to be the primary determinant of long-term
performance.
Date Trend SADIF Rating
The likelihood to outperform the market – as measured by the
19 Jun 2020 Above Average Outperformance StockMark (SMO) is well above average with a rating of
26 Mar 2020 Good
88/100.
The market risk associated with holding the shares – as measured by the
03 Mar 2020 Above Average StockMarks Market Risk (SMD3) – is low with a rating of 95/100.
Conclusions
Overall, we believe Puregold Price Club Inc to be an above average long-
Puregold Price Club Inc is a high quality term investment.
company. With good business rating, it
has fair financials and reasonable C22. Price Index (LHS) vs. Recommendations (RHS)
earnings quality. In terms of risk, is very
safe. With low operational risk, it has low
information risk and low market risk. The
current market sentiment in relation to the
company is positive notwithstanding
unfavorable technical indicators, positive
estimates and an attractive valuation. The
trend in Puregold Price Club Inc fair value
exchange rate against
Buy/Sell Recommendations
StockMarks rate the company quality but were not designed as price predictors. However, the rating deciles recently
favoured by the stock market, shown in chart C23, were used for short term recommendations shown below.
Recommendations SADIF Consensus C23. Sector Median Returns per Rating Decile
Strong Buy and/or
x
Very Positive
Buy and/or Positive x
Hold and/or Neutral
Sell and/or Negative
Strong Sell and/or
Very Negative
Puregold Price Club Inc quality is rated as above average (SMR = 84/100) in accordance with the following classification:
100-85 StockMarks 85-51 StockMarks 51-16 StockMarks 16-9 StockMarks 9-0 StockMarks
Good Above Average Average Below Average Risky

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 The StockMarks™ Ratings

SMR

SMD SMQ SMC

SMD2

SMB SMA
SMD1 SMS
SMG
SMD3 SMW
SMF
SMR
SMR

A SADIF recommendation based on equal weighting of company ratings for quality (SMQ), safety (SMD) and
investor sentiment (SMC). Investors with different strategies (e.g. growth or safety) should reweight accordingly.

A company's business quality based on its ratings

SMQ

SMB
Recommendation (SMR)

A company's overall quality rating based on its

for revenue growth, cash conversion and level of
ratings for business, financials and governance.
leverage.
Quality (SMQ)
SMD

SMF

A company's overall safety rating based on its A company's financial quality based on its ratings
ratings for operational, information and market risk. for financial strength, efficiency and performance.

A company's governance quality based on its

A company's overall sentiment rating based on
SMG
SMC

ratings for earnings quality, compensation policy

investors’ ratings for its current valuation, estimates
and tunnelling risk. For most companies, the rating
and technical indicators.
includes only the earnings quality rating (SMI).

A company's operational safety based on its ratings A company's valuation attractiveness based on the
SMD1

SMW

for revenue growth, leverage adequacy and ratings for its current price multiples,
Sentiment (SMC)

financial strength. outperformance likelihood and price attractiveness.

Safety (SMD)

A company's informational safety based on its A company's current estimates based on the ratings
SMD2

SMA

rating for earnings quality, data availability and for its current outlook, estimates forecasts and
reliability. consensus recommendations.
A company's market safety based on its ratings for A company's technical indicators rating based on
SMD3

SMS

its continuation as a listed company, its exposure to the current values for Bollinger Bands, rates of
takeover bids and its stock price volatility. change and relative strength indexes.
© 2007-2020 Marques Mendes & Associados Lda (MM&A). All Rights Reserved. This report is for information purposes only and is not a solicitation or
advice to buy or sell any security. The data contained within this report is not warranted to be accurate or complete. This report is only intended as a
summary of SADIF's stock ratings and not a recommendation for stock purchase or sale. Redistribution of this report without explicit permission is strictly
prohibited. All logos are the copyright property of their respective companies and are used here only to aid the reader in identification of the subject of
the article. The author of this article does not hold a position in any of the companies featured within this report. Frequency: Quarterly; Director: António
José Marques Mendes; NIPC: 504284444; ERC Registration No.: 125265; Editor and Owner: Marques Mendes & Associados, Lda Editorial
Headquarters: R. Domingos F. Pinto Basto, 21 - 3830-176 Ilhavo, Portugal

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