July 18, 2024
Top 10 Stock Cielo Hold 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: Cielo – Top 10 Stock in Independent Boards in Growth Markets
Cielo is listed as a top 10 stock on July 18, 2024 in the market index Independent Boards Growth Markets because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 30 (30% performer), Obermatt assesses an overall hold recommendation for Cielo on July 18, 2024.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Data Processing & Outsourcing |
| Index | BOVESPA, Independent Boards Growth Markets |
| Size class | 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 Cielo Hold
| 360 METRICS | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 30 |
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ANALYSIS: With an Obermatt 360° View of 30 (better than 30% compared with alternatives), overall professional sentiment and financial characteristics for the stock Cielo are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Cielo. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Cielo 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 company is also safely financed with a Safety rank of 51. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 8. Professional investors are more confident in 92% other stocks. The consolidated Growth Rank also has a low rank of 19, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 81 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 30, Cielo is worse than 70% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 96), and the financing structure is on the safer side (Safety Rank of 51). However, sentiment in the professional investor community is below-average (Sentiment Rank of 8), as is the growth momentum for the company (Growth Rank of 19). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Cielo negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock Cielo 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 Cielo. Analyst Opinions are at a rank of 26 (worse than 74% 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 17, 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 3, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 97% of competitors). On the upside, the Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% 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 8 (less encouraging than 92% compared with investment alternatives), Cielo 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 Cielo 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: Cielo Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, Cielo shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Cielo. Price-to-Sales is 71 which means that the stock price compared with what market professionals expect for future sales is lower than for 71% of comparable companies, indicating a good value for Cielo'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 85. Compared with other companies in the same industry, dividend yields of Cielo are expected to be higher than for 96% of all competitors (a Dividend Yield rank of 96). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Cielo'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 Cielo based on its detailed value metrics.
Growth Strategy: Cielo Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Cielo 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 three out of four indicators below average for Cielo. Sales Growth has a below market rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors. The same is valid for Capital Growth, with a rank of 27, and Profit Growth, with a rank of 11. Currently, professionals expect the company to grow its profits less than 89% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 82, which means that the stock returns have recently been above 82% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Cielo, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Cielo Debt Financing Safety above-average
| SAFETY METRICS | July 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 39 |
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| REFINANCING | ||||||||
| REFINANCING | 94 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 51 |
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ANALYSIS: With an Obermatt Safety Rank of 51 (better than 51% compared with alternatives), the company Cielo 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 Cielo 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 Cielo and the other two below average. Refinancing is at 94, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 94% of its competitors. But Leverage is high with a rank of 39, meaning the company has an above-average debt-to-equity ratio. It has more debt than 61% of its competitors. Liquidity is also on the riskier side with a rank of 27, meaning the company generates less profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 51 (better than 51% compared with alternatives), Cielo 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 Cielo 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. ...read more
Combined financial peformance: Cielo Above-Average Financial Performance
| COMBINED PERFORMANCE | July 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 63 |
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ANALYSIS: With an Obermatt Combined Rank of 63 (better than 63% compared with investment alternatives), Cielo (Data Processing & Outsourcing, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Cielo are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), are safely financed (Safety Rank of 51, which means low debt burdens), but show below-average growth (Growth Rank of 19). ...read more
RECOMMENDATION: A Combined Rank of 63, is a buy recommendation based on Cielo's financial characteristics. As the company Cielo's key financial metrics exhibit good value (Obermatt Value Rank of 96) but low growth (Obermatt Growth Rank of 19) while being safely financed (Obermatt Safety Rank of 51), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 96% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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