September 5, 2024
Top 10 Stock Brazilian Electric 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 September 05, 2024 in the market index Nuclear 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 67 (high 67% performer), Obermatt assesses an overall buy recommendation for Brazilian Electric on September 05, 2024.
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 Buy
| 360 METRICS | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| SENTIMENT | ||||||||
| SENTIMENT | 40 |
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| 360° VIEW | ||||||||
| 360° VIEW | 67 |
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ANALYSIS: With an Obermatt 360° View of 67 (better than 67% compared with alternatives), overall professional sentiment and financial characteristics for the stock Brazilian Electric are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Brazilian Electric. The consolidated Value Rank has an attractive rank of 64, 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 64% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 76. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 40. Professional investors are more confident in 60% other stocks. The consolidated Growth Rank also has a low rank of 46, 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. 54 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 67, Brazilian Electric is better positioned than 67% 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 64), and the financing structure is on the safer side (Safety Rank of 76). However, sentiment in the professional investor community is below-average (Sentiment Rank of 40), as is the growth momentum for the company (Growth Rank of 46). 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 Brazilian Electric only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 40 (better than 40% 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 half of the metrics below and half above average for Brazilian Electric. Analyst Opinions are at a rank of 78 (better than 78% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Brazilian Electric. But Market Pulse has a low rank of 23, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 77% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 28, which means that, currently, professional investors hold less stock in this company than in 72% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 40 (less encouraging than 60% compared with investment alternatives), Brazilian Electric has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Brazilian Electric Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 64 (better than 64% 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 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% 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 90, and for Dividend Yield with a Dividend Yield Rank of 60. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 66% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 34). 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 64, 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 low
| GROWTH METRICS | September 5, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 14 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 81 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 36 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 62 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 46 |
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ANALYSIS: With an Obermatt Growth Rank of 46 (better than 46% compared with alternatives), Brazilian Electric shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Brazilian Electric. Profit Growth has a rank of 81, which means that currently professionals expect the company to grow its profits more than 81% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 62 (above 62% of alternative investments). But Sales Growth has a below the median rank of 14, which means that, currently, professionals expect the company to grow less than 86% of its competitors, and Capital Growth also has a lower rank of 36. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 46, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Brazilian Electric. ...read more
Safety Strategy: Brazilian Electric Debt Financing Safety very solid
| SAFETY METRICS | September 5, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 73 |
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| REFINANCING | ||||||||
| REFINANCING | 84 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 76 |
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ANALYSIS: With an Obermatt Safety Rank of 76 (better than 76% compared with alternatives) for 2024, the company Brazilian Electric has safe financing practices, which means that their overall debt burden is low. 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 73, meaning the company has a below-average debt-to-equity ratio. It has less debt than 73% of its competitors.Refinancing is at a rank of 84, 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 84% of its competitors. Liquidity is at 27, meaning that the company generates less profit to service its debt than 73% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 76 (better than 76% compared with alternatives), Brazilian Electric has a financing structure that is significantly 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 | September 5, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 64 |
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| GROWTH | ||||||||
| GROWTH | 46 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 80 |
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ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% 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 Value Rank of 64 (better than 64% of alternatives), are safely financed (Safety Rank of 76, which means low debt burdens), but show below-average growth (Growth Rank of 46). ...read more
RECOMMENDATION: A Combined Rank of 80, is a strong buy recommendation based on Brazilian Electric's financial characteristics. As the company Brazilian Electric's key financial metrics exhibit good value (Obermatt Value Rank of 64) but low growth (Obermatt Growth Rank of 46) while being safely financed (Obermatt Safety Rank of 76), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 64% 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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