Lewis Group (LEW.JO)

Consumer · JSE · South Africa

R95.93+5.82% today

Fundamentals

Market capR5.09B

P/E ratio6.2

Dividend yield9.16%

Revenue growth (YoY)+11.0%

Profit margin8.3%

Return on equity16.2%

52-week rangeR70.12 to R100.56

Valuation and ratings

DCF fair valueR216.88

Upside to fair value+126.1%

Moat score65/100

Overall rating81/100, Strong Buy

Lewis Group trades at R95.93, which is 126% below the R216.88 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 65 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 6.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Lewis Group

Lewis Group Limited, together with its subsidiaries, engages in the retail of household furniture, home appliances, electronic goods, and homewares in South Africa, Botswana, Lesotho, Eswatini, and Namibia. It operates through Traditional, and Speciality segments. The company retails electrical appliances; sound and vision equipment; beds and mattresses; and various furniture products through its stores under the Lewis, Best Home and Electric, Bedzone, United Furniture Outlets, and Beares brand names. It also provides microinsurance to customers purchasing merchandise on credit under the Monarch Insurance brand. Lewis Group Limited was founded in 1934 and is based in Cape Town, South Africa.

Industry: Specialty RetailHQ: South Africa

LEW.JO passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Quality at a fair price

Good businesses, not cheap ones. A wide moat and a strong rating, at a multiple that has not run away.

Deep value, with a pulse

A very low earnings multiple is usually a warning. This screen demands a low multiple AND evidence the business still works.

Dividend powerhouses

Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.

Growth at a reasonable price

Real growth, without the multiple that usually comes attached to it. The middle ground between value and growth, and the hardest place to find anything.

Low volatility defensives

Companies that move less than the market and pay you to wait. The holdings that let you sleep, and let you hold everything else.

Common questions

Is Lewis Group (LEW.JO) undervalued?

Against our discounted cash flow estimate of R216.88, LEW.JO at R95.93 is 126% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is LEW.JO's P/E ratio?

LEW.JO trades at 6.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Open LEW.JO in the app Free guides and screens

Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.