August 29, 2024
Top 10 Stock Colbún 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: Colbún – Top 10 Stock in Low Waste Leaders
Colbún is listed as a top 10 stock on August 29, 2024 in the market index Low Waste 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 73 (high 73% performer), Obermatt assesses an overall buy recommendation for Colbún on August 29, 2024.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Power Producers & Traders |
| Index | IPSA, Low Emissions, Human Rights, Low Waste, Recycling |
| 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 Colbún Buy
| 360 METRICS | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 73 |
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ANALYSIS: With an Obermatt 360° View of 73 (better than 73% compared with alternatives), overall professional sentiment and financial characteristics for the stock Colbún are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Colbún. The consolidated Value Rank has an attractive rank of 72, which means that the share price of Colbún 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 72% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 92. 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 6, 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. 94 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 73, Colbún is better positioned than 73% 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 72), secure financing practices (Safety Rank of 92), 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 6), 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 Colbún 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 Colbún 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 Colbún is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Colbún. Analyst Opinions are at a rank of 60 (better than 60% 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 with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Colbún. 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. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 71 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 71% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), Colbún has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Colbún stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Colbún Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 72 (better than 72% compared with alternatives), Colbún 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 Colbún. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% of comparable companies, indicating a good value concerning Colbún'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 74, and for Dividend Yield with a Dividend Yield Rank of 96. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 58% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 42). 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 72, is a buy recommendation based on Colbún'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 Colbún 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 Colbún shares. ...read more
Growth Strategy: Colbún Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 6 (better than 6% compared with alternatives), Colbún 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 all four metrics below average for Colbún. Sales Growth has a rank of 42, which means that currently professionals expect the company to grow less than 58% of its competitors. The same is valid for Profit Growth, with a rank of 10, and Capital Growth with 1. In addition, Stock Returns have a below market rank of 20, which means that the stock returns have recently been below 80% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 6, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. ...read more
Safety Strategy: Colbún Debt Financing Safety very solid
| SAFETY METRICS | August 29, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 61 |
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| REFINANCING | ||||||||
| REFINANCING | 88 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 76 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
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ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2024, the company Colbún has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Colbún 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 all three are above average for Colbún. Leverage is at 61, meaning the company has a below-average debt-to-equity ratio. It has less debt than 61% of its competitors. Refinancing is at a rank of 88, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 88% of its competitors. Finally, Liquidity is also good at a rank of 76, which means that the company generates more profit to service its debt than 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), Colbún has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Colbún Above-Average Financial Performance
| COMBINED PERFORMANCE | August 29, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 72 |
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| GROWTH | ||||||||
| GROWTH | 6 |
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| SAFETY | ||||||||
| SAFETY | 76 |
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| COMBINED | ||||||||
| COMBINED | 66 |
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ANALYSIS: With an Obermatt Combined Rank of 66 (better than 66% compared with investment alternatives), Colbún (Power Producers & Traders, Chile) shares have above-average financial characteristics compared with similar stocks. Shares of Colbún are a good value (attractively priced) with a consolidated Value Rank of 72 (better than 72% of alternatives), are safely financed (Safety Rank of 92, which means low debt burdens), but show below-average growth (Growth Rank of 6). ...read more
RECOMMENDATION: A Combined Rank of 66, is a buy recommendation based on Colbún's financial characteristics. As the company Colbún's key financial metrics exhibit good value (Obermatt Value Rank of 72) but low growth (Obermatt Growth Rank of 6) while being safely financed (Obermatt Safety Rank of 92), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 72% 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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