November 7, 2024
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 Bolsa de Valores-Mercadorias | BOVESPA
Brazilian Electric 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 where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 86 (top 86% performer), Obermatt assesses an overall strong buy recommendation for Brazilian Electric on November 07, 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 Strong Buy
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 86 |
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ANALYSIS: With an Obermatt 360° View of 86 (better than 86% compared with alternatives) for 2024, 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 half of the indicators below and half above average for Brazilian Electric. The consolidated Value Rank has an attractive rank of 61, which means that the share price of Brazilian Electric is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 61% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 72. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 86. But the consolidated Growth Rank has a low rank of 48, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 52 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 86, Brazilian Electric is better positioned than 86% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 61), secure financing practices (Safety Rank of 72), and positive market sentiment in the professional investor community (Sentiment Rank of 86). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 48), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Brazilian Electric is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Brazilian Electric very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Brazilian Electric is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Brazilian Electric. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 69, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Brazilian Electric. Finally, the Professional Investors rank is 84, which means that currently, professional investors hold more stock in this company than in 84% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Brazilian Electric has a reputation among professional investors that is significantly higher than that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 21, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 79% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Brazilian Electric is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Brazilian Electric Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 61 (better than 61% 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 89 which means that the stock price compared with what market professionals expect for future profits is lower than for 89% 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 95, and for Dividend Yield with a Dividend Yield Rank of 53. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 76% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 24). 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 61, 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
ANALYSIS: With an Obermatt Growth Rank of 48 (better than 48% 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 three out of four metrics below average for Brazilian Electric. While Profit Growth has a good rank of 84, as professionals currently expect the company to grow its profits more than 84% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 8, which means that currently professionals expect the company to grow less than 92% of its competitors, while Capital Growth has a rank of 46 and Stock Returns have been below market median, with a rank of 46 (54% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 48, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Brazilian Electric Debt Financing Safety above-average
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 73 |
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| REFINANCING | ||||||||
| REFINANCING | 84 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 26 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 72 |
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ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% 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 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 26, meaning that the company generates less profit to service its debt than 74% 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 72 (better than 72% 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 Above-Average Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 61 |
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| GROWTH | ||||||||
| GROWTH | 48 |
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| SAFETY | ||||||||
| SAFETY | 26 |
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| COMBINED | ||||||||
| COMBINED | 72 |
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ANALYSIS: With an Obermatt Combined Rank of 72 (better than 72% compared with investment alternatives), Brazilian Electric (Electric Utilities, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Brazilian Electric are a good value (attractively priced) with a consolidated Value Rank of 61 (better than 61% of alternatives), are safely financed (Safety Rank of 72, which means low debt burdens), but show below-average growth (Growth Rank of 48). ...read more
RECOMMENDATION: A Combined Rank of 72, is a 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 61) but low growth (Obermatt Growth Rank of 48) while being safely financed (Obermatt Safety Rank of 72), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 61% 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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