Indigo Books & Music (TSX:IDG) GF Value Rank : 6 (As of Apr. 29, 2024)

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What is Indigo Books & Music GF Value Rank?

Indigo Books & Music has the GF Value Rank of 6.

The GF Value Rank is determined by the price-to-GF-Value (P/GF Value) ratio, a proprietary metric calculated based on historical multiples along with an adjustment factor based on a company's past returns and growth and future estimates of the business' performance.

GuruFocus found that for valuation, we cannot simply give stocks a better GF Value rank simply because they have a lower P/GF Value ratio. Backtesting shows that over the long term, the two worst-performing groups are the most expensive group (with the highest P/GF Value ratio) and the least expensive group (with the lowest P/GF Value ratio).

We can understand why the most expensive group underperforms. We were initially puzzled by the underperformance of the least expensive group, but we realized there is a reason why some stocks are super cheap. If they look too undervalued, it is often because the businesses behind them are poor quality. The market realized this and gave them low valuations. In a way, the market is efficient.

After multiple backtesting analyses, we granted the stocks in third-cheapest percentile the highest GF Value rank, as they have performed the best over a full market cycle. Stock performance is actually not as sensitive to valuation as it is to growth and profitability. On average, the companies in the 20%-50% valuation groups have similar performances. Therefore, we should avoid the most expensive and the least expensive stocks. We can be more tolerant of valuation.

Please click GF Score to see more details on the GF Score's 5 Key Aspects of Analysis.

Competitive Comparison of Indigo Books & Music's GF Value Rank

For the Specialty Retail subindustry, Indigo Books & Music's GF Value Rank, along with its competitors' market caps and GF Value Rank data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Indigo Books & Music's GF Value Rank Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, Indigo Books & Music's GF Value Rank distribution charts can be found below:

* The bar in red indicates where Indigo Books & Music's GF Value Rank falls into.

Indigo Books & Music GF Value Rank Related Terms

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Indigo Books & Music (TSX:IDG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Indigo Books & Music Inc (TSX:IDG) » Definitions » GF Value Rank

Comparable Companies

Traded in Other Exchanges

IDGBF:USA

Address

620 King Street West, Suite 400, Toronto, ON, CAN, M5V 1M6

Website

https://www.chapters.indigo.ca

Indigo Books & Music Inc is a Canada-based book, gift, and toy retailer. It operates a chain of retail bookstores across all Canada, including approximately 87 superstores under Indigo and Chapters banners names as well as over 80 small format stores under the banners Coles, Indigospirit, SmithBooks, and The Book company. Its digital platforms sell expanded selection of books, gifts, toys, and paper products. It also has interest in Calendar Club of Canada, which operates seasonal kiosks and year-round stores in shopping malls across Canada. The company generates its revenue from Superstores, Small format stores, Online, and Others.

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