Fact based stock research
Rumo (BOVESPA:RAIL3)
BRRAILACNOR9
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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.
Rumo stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Rumo (Railroads, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Rumo are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 69), and are safely financed (Safety Rank of 53), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Rumo's financial characteristics. As the company Rumo's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 57), above-average growth (Obermatt Growth Rank of 69), and indicate that the company is safely financed (Obermatt Safety Rank of 53), 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 Rumo. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | Brazil |
| Industry | Railroads |
| Index | BOVESPA, Independent Boards Growth Markets |
| Size class | Large |
This stock has achievements: Top 10 Stock.
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Rumo
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 10 |
|
37 |
|
25 |
|
57 |
|
| GROWTH | ||||||||
| GROWTH | 16 |
|
79 |
|
97 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
68 |
|
57 |
|
53 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
100 |
|
69 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
95 |
|
70 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), Rumo (Railroads, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Rumo are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 69), and are safely financed (Safety Rank of 53), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on Rumo's financial characteristics. As the company Rumo's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 57), above-average growth (Obermatt Growth Rank of 69), and indicate that the company is safely financed (Obermatt Safety Rank of 53), 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 Rumo. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 10 |
|
37 |
|
25 |
|
57 |
|
| GROWTH | ||||||||
| GROWTH | 16 |
|
79 |
|
97 |
|
69 |
|
| SAFETY | ||||||||
| SAFETY | 30 |
|
68 |
|
57 |
|
53 |
|
| COMBINED | ||||||||
| COMBINED | 8 |
|
80 |
|
72 |
|
84 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), Rumo shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Rumo. Price-to-Profit (also referred to as price-earnings, P/E) is 58 which means that the stock price compared with what market professionals expect for future profits is lower than for 58% of comparable companies, indicating a good value concerning Rumo's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53, which means that the stock price is lower as regards to invested capital than for 53% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 66% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 57, is a buy recommendation based on Rumo's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 13 |
|
44 |
|
30 |
|
44 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 23 |
|
18 |
|
27 |
|
58 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 38 |
|
62 |
|
39 |
|
53 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
38 |
|
30 |
|
34 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 10 |
|
37 |
|
25 |
|
57 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Rumo shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Rumo. Sales Growth has a value of 72 which means that currently professionals expect the company to grow more than 72% of its competitors. Profit Growth with a value of 94 and Capital Growth with a rank of 56 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 17, which means that stock returns have recently been below 83% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Rumo has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Rumo, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 31 |
|
74 |
|
94 |
|
72 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 94 |
|
72 |
|
73 |
|
94 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
90 |
|
86 |
|
56 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 13 |
|
13 |
|
61 |
|
17 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 16 |
|
79 |
|
97 |
|
69 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Rumo 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 Rumo 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 just one indicator above average for Rumo and the other two below average. Refinancing is at 75, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. But Leverage is high with a rank of 43, meaning the company has an above-average debt-to-equity ratio. It has more debt than 57% of its competitors. Liquidity is also on the riskier side with a rank of 25, meaning the company generates less profit to service its debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Rumo has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Rumo are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Rumo and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 47 |
|
44 |
|
46 |
|
43 |
|
| REFINANCING | ||||||||
| REFINANCING | 28 |
|
91 |
|
73 |
|
75 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 33 |
|
30 |
|
31 |
|
25 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 30 |
|
68 |
|
57 |
|
53 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
79 |
|
71 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
78 |
|
38 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
55 |
|
60 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
83 |
|
67 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
100 |
|
69 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Rumo from November 14, 2024.
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