June 15, 2023
Top 10 Stock Brazilian Electric 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: Brazilian Electric – Top 10 Stock in Nuclear Energy
Brazilian Electric is listed as a top 10 stock on June 15, 2023 in the market index Nuclear 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 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Brazilian Electric on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Electric Utilities |
| Index | BOVESPA, BOVESPA, Low Emissions, Energy Efficient, Human Rights, Independent Boards Growth Markets, Nuclear |
| 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 Brazilian Electric Strong Buy
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 66 |
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| GROWTH | ||||||||
| GROWTH | 96 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| SENTIMENT | ||||||||
| SENTIMENT | 33 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Brazilian Electric are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Brazilian Electric. The consolidated Value Rank has an attractive rank of 66, which means that the share price of Brazilian Electric 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 66% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 96, 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 58. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 33. Professional investors are more confident in 67% other stocks. ...read more
RECOMMENDATION: With a 360° View of 77, Brazilian Electric is better positioned than 77% 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 66), above-average growth (Growth Rank of 96), and safe financing practices (Safety Rank of 58), 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 33), 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 Brazilian Electric 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 Brazilian Electric only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 33 (better than 33% compared with alternatives), overall professional sentiment and engagement for the stock Brazilian Electric is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Brazilian Electric. Analyst Opinions are at a rank of 79 (better than 79% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 33, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Brazilian Electric. The Professional Investors rank is also low at 11, meaning that professional investors hold less stock in this company than in 89% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 40, which means that the current professional news and professional social networks are critical of this company (more negative news than for 60% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 33 (less encouraging than 67% compared with investment alternatives), Brazilian Electric has a reputation among professional investors that is below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Brazilian Electric Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 66 (better than 66% compared with alternatives), Brazilian Electric shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Brazilian Electric. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 77 which means that the stock price compared with what market professionals expect for future profits is lower than for 77% of comparable companies, indicating a good value concerning Brazilian Electric's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 81, and for Dividend Yield with a Dividend Yield Rank of 58. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 72% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 28). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 66, is a BUY recommendation based on Brazilian Electric's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Brazilian Electric has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Brazilian Electric shares. ...read more
Growth Strategy: Brazilian Electric Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 96 (better than 96% compared with alternatives) for 2023, Brazilian Electric 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 all but one indicator above average for Brazilian Electric. Sales Growth has a value of 77 which means that currently professionals expect the company to grow more than 77% of its competitors. Profit Growth with a value of 85 and Capital Growth with a rank of 78 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 31, which means that stock returns have recently been below 69% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 96, is a BUY recommendation for growth and momentum investors. Brazilian Electric 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 Brazilian Electric, 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. ...read more
Safety Strategy: Brazilian Electric Debt Financing Safety above-average
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 65 |
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| REFINANCING | ||||||||
| REFINANCING | 76 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 25 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
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ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Brazilian Electric 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 Brazilian Electric 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 where two out of three are above average for Brazilian Electric.Leverage is at 65, meaning the company has a below-average debt-to-equity ratio. It has less debt than 65% of its competitors.Refinancing is at a rank of 76, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 76% of its competitors. Liquidity is at 25, meaning that the company generates less profit to service its debt than 75% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), Brazilian Electric has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Brazilian Electric Top Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 66 |
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| GROWTH | ||||||||
| GROWTH | 96 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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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), Brazilian Electric (Electric Utilities, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Brazilian Electric are a good value (attractively priced) with a consolidated Obermatt Value Rank of 66 (better than 66% of alternatives), show above-average growth (Growth Rank of 96), and are safely financed (Safety Rank of 58), which means low debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 94, is a strong buy recommendation based on Brazilian Electric's financial characteristics. As the company Brazilian Electric's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 66), above-average growth (Obermatt Growth Rank of 96), and indicate that the company is safely financed (Obermatt Safety Rank of 58), 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 Brazilian Electric. 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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