January 18, 2024
Top 10 Stock A2A 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: A2A – Top 10 Stock in Sound Pay Practices in Europe
A2A is listed as a top 10 stock on January 18, 2024 in the market index Sound Pay Europe because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for A2A on January 18, 2024.
Snapshot: Obermatt Ranks
| Country | Italy |
| Industry | Multi-Utilities |
| Index | MIB, Low Emissions, Dividends Europe, Diversity Europe, Human Rights, Sound Pay Europe |
| Size class | XX-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 A2A Strong Buy
| 360 METRICS | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 78 |
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| 360° VIEW | ||||||||
| 360° VIEW | 94 |
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ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock A2A are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for A2A. The consolidated Value Rank has an attractive rank of 92, which means that the share price of A2A 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 92% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 81, 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. The company is also safely financed with a Safety rank of 73. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 78. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, A2A is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 92), above-average growth (Growth Rank of 81), safe financing practices (Safety Rank of 73), and a positive market sentiment in the professional investor community (Sentiment Rank of 78), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of A2A is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for A2A very positive
ANALYSIS: With an Obermatt Sentiment Rank of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock A2A is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for A2A. Analyst Opinions are at a rank of 63 (better than 63% 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 79, 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 A2A. Finally, the Professional Investors rank is 72, which means that currently, professional investors hold more stock in this company than in 72% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 78 (more positive than 78% compared with investment alternatives), A2A 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 23, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 77% of competitors). This could mean future risks and should make investors careful. Attention to negative news for A2A 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: A2A Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 92 (better than 92% compared with alternatives) for 2024, A2A shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for A2A. Price-to-Sales is 91 which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value for A2A's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 78% 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 78. Compared with other companies in the same industry, dividend yields of A2A are expected to be higher than for 67% of all competitors (a Dividend Yield rank of 67). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 92, is a buy recommendation based on A2A'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 A2A based on its detailed value metrics.
Growth Strategy: A2A Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, A2A 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 half of the indicators below and half above average for A2A. Profit Growth has a rank of 76, which means that currently professionals expect the company to grow its profits more than 76% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 93 (above 93% of alternative investments). But Sales Growth has a below the median rank of 29, which means that, currently, professionals expect the company to grow less than 71% of its competitors, and Capital Growth also has a lower rank of 46. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for A2A. ...read more
Safety Strategy: A2A Debt Financing Safety above-average
| SAFETY METRICS | January 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 46 |
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| REFINANCING | ||||||||
| REFINANCING | 71 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 71 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company A2A has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of A2A is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for A2A. Refinancing is at 71, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. Liquidity is also good at 71, meaning the company generates more profit to service its debt than 71% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 46, which means the company has an above-average debt-to-equity ratio. It has more debt than 54% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 73 (better than 73% compared with alternatives), A2A has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and A2A could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: A2A Top Financial Performance
| COMBINED PERFORMANCE | January 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 92 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 71 |
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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), A2A (Multi-Utilities, Italy) shares have much better financial characteristics than comparable stocks. Shares of A2A are a good value (attractively priced) with a consolidated Value Rank of 92 (better than 92% of alternatives), show above-average growth (Growth Rank of 81), and are safely financed (Safety Rank of 73), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 98, is a strong buy recommendation based on A2A's financial characteristics. As the company A2A's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 92), above-average growth (Obermatt Growth Rank of 81), and indicate that the company is safely financed (Obermatt Safety Rank of 73), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of A2A. 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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