December 5, 2024
Top 10 Stock AES Sell 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: AES – Top 10 Stock in Customer Satisfaction Leaders in the United States
AES is listed as a top 10 stock on December 05, 2024 in the market index Customer Focus US because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 9 (9% performer), Obermatt issues an overall sell recommendation for AES on December 05, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Power Producers & Traders |
| Index | Low Emissions, Customer Focus US, Employee Focus US, S&P 500 |
| 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 AES Sell
| 360 METRICS | December 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 5 |
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| SENTIMENT | ||||||||
| SENTIMENT | 57 |
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| 360° VIEW | ||||||||
| 360° VIEW | 9 |
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ANALYSIS: With an Obermatt 360° View of 9 (better than 9% compared with alternatives), overall professional sentiment and financial characteristics for the stock AES are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for AES. The consolidated Value Rank has an attractive rank of 77, which means that the share price of AES is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 77% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 57, which means that professional investors are more optimistic about the stock than for 57% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 3, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 5, meaning the company has a riskier financing structure than 95 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 9, AES is worse than 91% of all alternative stock investment opportunities based on the Obermatt Method. This means that AES shares are on the riskier side for investors. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 77) and positive market sentiment in the professional investor community (Sentiment Rank of 57), but growth expectations are below-average (Growth Rank of 3) and the financing structure is on the risky side(Safety Rank of 5). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of AES is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for AES positive
ANALYSIS: With an Obermatt Sentiment Rank of 57 (better than 57% compared with alternatives), overall professional sentiment and engagement for the stock AES is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for AES. Analyst Opinions are at a rank of 86 (better than 86% 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 55, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 50, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 50% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 15, which means that currently, professional investors hold less stock in this company than in 85% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 57 (more positive than 57% compared with investment alternatives), AES has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in AES may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in AES. ...read more
Value Strategy: AES Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 77 (better than 77% compared with alternatives) for 2024, AES shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for AES. Price-to-Sales (P/S) is 100, which means that the stock price compared with what market professionals expect for future sales is lower than for 100% of comparable companies, indicating a good value concerning AES's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 100% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 87 (dividends are expected to be higher than 87% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 90% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for AES to 10. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 77, is a buy recommendation based on AES's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: AES Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), AES shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for AES. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors. The same is valid for Profit Growth, with a rank of 14, and Capital Growth with 18. In addition, Stock Returns have a below market rank of 3, which means that the stock returns have recently been below 97% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: AES Debt Financing Safety risky
| SAFETY METRICS | December 5, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 4 |
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| REFINANCING | ||||||||
| REFINANCING | 11 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 14 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 5 |
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ANALYSIS: With an Obermatt Safety Rank of 5 (better than 5% compared with alternatives), the company AES has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of AES is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for AES. Liquidity is at 14, meaning that the company generates less profit to service its debt than 86% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 4, meaning the company has an above-average debt-to-equity ratio. It has more debt than 96% of its competitors. Finally, Refinancing is at a rank of 11 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 89% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 5 (worse than 95% compared with alternatives), AES has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: AES Lowest Financial Performance
| COMBINED PERFORMANCE | December 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 77 |
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| GROWTH | ||||||||
| GROWTH | 3 |
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| SAFETY | ||||||||
| SAFETY | 14 |
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| COMBINED | ||||||||
| COMBINED | 5 |
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ANALYSIS: With an Obermatt Combined Rank of 5 (worse than 95% compared with investment alternatives), AES (Power Producers & Traders, USA) shares have lower financial characteristics compared with similar stocks. Shares of AES are a good value (attractively priced) with a consolidated Value Rank of 77 (better than 77% of alternatives) but show below-average growth (Growth Rank of 3), and are riskily financed (Safety Rank of 5), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 5, is a sell recommendation based on AES's financial characteristics. As the company AES's key financial metrics exhibit good value (Obermatt Value Rank of 77) but low growth (Obermatt Growth Rank of 3) and risky financing practices (Obermatt Safety Rank of 5), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 77% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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