Fact based stock research
ERG (BIT:ERG)

IT0001157020

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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.

ERG stock research in summary

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ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), ERG (Power Producers & Traders, Italy) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of ERG are low in value (priced high) with a consolidated Value Rank of 31 (worse than 69% of alternatives) and show below-average growth (Growth Rank of 29) but are safely financed (Safety Rank of 78), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on ERG's financial characteristics. As the company ERG's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 31) and low growth (Obermatt Growth Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 78) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	31
Growth Rank	29
Safety Rank	78
Combined Rank	34

Country	Italy
Industry	Power Producers & Traders
Index	MIB, Human Rights
Size class	Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: ERG

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	43	19	11	31
GROWTH
GROWTH	41	5	15	29
SAFETY
SAFETY	30	63	60	78
SENTIMENT
SENTIMENT	n/a	53	77	^new
360° VIEW
360° VIEW	n/a	13	26	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better ERG is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	43	19	11	31
GROWTH
GROWTH	41	5	15	29
SAFETY
SAFETY	30	63	60	78
COMBINED
COMBINED	14	12	4	34

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of ERG the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), ERG shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for ERG. Expected dividend yields are higher than for 65% of comparable companies (a Dividend Yield rank of 65), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than for 83% of comparable companies, indicating a low value concerning ERG's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for ERG with a rank of 42. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 58% of comparable companies, indicating a low value concerning ERG's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a hold recommendation based on ERG's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, ERG may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	21	26	5	17
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	51	17	23	42
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	32	44	31	53
DIVIDEND YIELD
DIVIDEND YIELD	61	37	38	65
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	43	19	11	31

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of ERG; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), ERG 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 indicators below-average for ERG. While Sales Growth ranks at 89, professionals currently expect the company to grow more than 89% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 49, which means that, currently, professionals expect the company to grow its profits less than 51% of its competitors, and Capital Growth has a low rank of 1. Historic stock returns were also below average with a current Stock Returns rank of 19 which means that the stock returns have recently been below 81% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance isn't stellar here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	18	1	90	89
PROFIT GROWTH
PROFIT GROWTH	59	64	20	49
CAPITAL GROWTH
CAPITAL GROWTH	n/a	4	31	1
STOCK RETURNS
STOCK RETURNS	76	37	29	19
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	41	5	15	29

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of ERG.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company ERG has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of ERG 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 ERG. Leverage is at 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Refinancing is at a rank of 81, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. Finally, Liquidity is also good at a rank of 56, which means that the company generates more profit to service its debt than 56% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), ERG 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. Investors may not have a debt issue with ERG but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	47	50	52	50
REFINANCING
REFINANCING	39	75	43	81
LIQUIDITY
LIQUIDITY	25	44	70	56
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	30	63	60	78

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of ERG and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	1	78	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	67	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	100	47	^new
MARKET PULSE
MARKET PULSE	n/a	44	62	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	53	77	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for ERG.
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