November 7, 2024
Top 10 Stock CEMIG 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: CEMIG – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
CEMIG is listed as a top 10 stock on November 07, 2024 in the market index BOVESPA because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 72 (high 72% performer), Obermatt assesses an overall buy recommendation for CEMIG on November 07, 2024.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Electric Utilities |
| Index | BOVESPA, Low Emissions, Human Rights, Low Waste, Recycling, Solar Tech |
| Size class | X-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 CEMIG Buy
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 52 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| SENTIMENT | ||||||||
| SENTIMENT | 16 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% compared with alternatives), overall professional sentiment and financial characteristics for the stock CEMIG are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for CEMIG. The consolidated Value Rank has an attractive rank of 96, which means that the share price of CEMIG 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 96% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 52, 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 64. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 16. Professional investors are more confident in 84% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, CEMIG is better positioned than 72% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 96), above-average growth (Growth Rank of 52), and safe financing practices (Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 16), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of CEMIG is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for CEMIG negative
ANALYSIS: With an Obermatt Sentiment Rank of 16 (better than 16% compared with alternatives), overall professional sentiment and engagement for the stock CEMIG is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for CEMIG. Analyst Opinions are at a rank of 34 (worse than 66% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 38, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 25, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 75% of competitors). On the upside, the Professional Investors rank is 50, which means that professional investors hold more stock in this company than in 50% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 16 (less encouraging than 84% compared with investment alternatives), CEMIG has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make CEMIG stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: CEMIG Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, CEMIG shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for CEMIG. Price-to-Sales is 87 which means that the stock price compared with what market professionals expect for future sales is lower than for 87% of comparable companies, indicating a good value for CEMIG's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 93% 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 73. Compared with other companies in the same industry, dividend yields of CEMIG are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on CEMIG'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 CEMIG based on its detailed value metrics.
Growth Strategy: CEMIG Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 52 (better than 52% compared with alternatives), CEMIG 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 half of the indicators below and half above average for CEMIG. Capital Growth has a rank of 50, which means that currently professionals expect the company to grow its invested capital more than 33% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 76 (above 76% of alternative investments). But Sales Growth has only a rank of 33, which means that, currently, professionals expect the company to grow less than 67% of its competitors, and Profit Growth is also low at a rank of 33. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 52, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for CEMIG, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: CEMIG Debt Financing Safety above-average
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 81 |
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| REFINANCING | ||||||||
| REFINANCING | 16 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 74 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
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ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company CEMIG 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 CEMIG 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 CEMIG. Leverage is at a rank of 81, meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors. Liquidity is also good at a rank of 74, meaning the company generates more profit to service its debt than 74% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 16, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), CEMIG has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for CEMIG. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: CEMIG Top Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 52 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| COMBINED | ||||||||
| COMBINED | 94 |
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ANALYSIS: With an Obermatt Combined Rank of 94 (better than 94% compared with investment alternatives), CEMIG (Electric Utilities, Brazil) shares have much better financial characteristics than comparable stocks. Shares of CEMIG are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), show above-average growth (Growth Rank of 52), and are safely financed (Safety Rank of 64), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 94, is a strong buy recommendation based on CEMIG's financial characteristics. As the company CEMIG's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 96), above-average growth (Obermatt Growth Rank of 52), and indicate that the company is safely financed (Obermatt Safety Rank of 64), 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 CEMIG. 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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