November 7, 2024
Top 10 Stock Ero Copper Sell 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: Ero Copper – Top 10 Stock in Lithium Mining and Production
Ero Copper is listed as a top 10 stock on November 07, 2024 in the market index Lithium 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 below average and thus a signal for caution. Based on the Obermatt 360° View of 20 (20% performer), Obermatt issues an overall sell recommendation for Ero Copper on November 07, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Copper |
| Index | Copper, Iron, Lithium, Rare Earth, Silver, Uranium, TSX Composite |
| Size class | Medium |
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 Ero Copper Sell
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| SENTIMENT | ||||||||
| SENTIMENT | 33 |
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| 360° VIEW | ||||||||
| 360° VIEW | 20 |
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ANALYSIS: With an Obermatt 360° View of 20 (better than 20% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ero Copper are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Ero Copper. The consolidated Value Rank has an attractive rank of 54, which means that the share price of Ero Copper 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 54% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 69, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 33. Professional investors are more confident in 67% other stocks. Worryingly, the company has risky financing, with a Safety rank of 6. This means 94% of comparable companies have a safer financing structure than Ero Copper. ...read more
RECOMMENDATION: With a consolidated 360° View of 20, Ero Copper is worse than 80% of all alternative stock investment opportunities based on the Obermatt Method. This means that Ero Copper shares are on the riskier side for investors. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 54 and the Growth Rank above-average at 69, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 33. In addition, the company financing structure is on the riskier side (Safety Rank of 6). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should 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 Ero Copper only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 33 (better than 33% compared with alternatives), overall professional sentiment and engagement for the stock Ero Copper is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and half above average for Ero Copper. 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. Market Pulse is also positive with a rank of 70, which means that the current professional news and professional social networks are positive when discussing this company (more positive news than for 70% of competitors). But Analyst Opinions Change is negative with a below 50 rank of 11, which means that stock research experts are changing their opinions for the worse in recommending the company. In other words, they are getting more critical of investments in Ero Copper. There are also only so many institutional investors holding company stock with a Professional Investors rank of 24, which means that, currently, professional investors hold less stock in this company than in 76% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 33 (less encouraging than 67% compared with investment alternatives), Ero Copper has a reputation among professional investors that is below that of its competitors. The signals are ambivalent. The positive news in the market contradicts the negative change in analyst recommendations. Since the overall analyst recommendations are still above average, the stock may be safer for investing, especially if it is not an extra-large company where Pros tend to be less present. In such a case, the Pro Investor rank is not a problem. ...read more
Value Strategy: Ero Copper Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), Ero Copper shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Ero Copper. Price-to-Sales (P/S) is 54, which means that the stock price compared with what market professionals expect for future sales is lower than for 54% of comparable companies, indicating a good value concerning Ero Copper's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 97% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 37 (dividends are expected to be higher than for 37% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 82% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Ero Copper to 18. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on Ero Copper's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Ero Copper Growth Momentum good
| GROWTH METRICS | November 7, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 100 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 59 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 33 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 47 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 69 |
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ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Ero Copper shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Ero Copper. Sales Growth has a rank of 100, which means that, currently, professionals expect the company to grow more than 100% of its competitors. Profit Growth with a rank of 59 is also above average. But Capital Growth has only a rank of 33, and Stock Returns with 47 are also below-average. Stock returns for Ero Copper have recently been below 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Ero Copper. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Ero Copper Debt Financing Safety risky
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 10 |
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| REFINANCING | ||||||||
| REFINANCING | 1 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 49 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 6 |
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ANALYSIS: With an Obermatt Safety Rank of 6 (better than 6% compared with alternatives), the company Ero Copper has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Ero Copper is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Ero Copper. Liquidity is at 49, meaning that the company generates less profit to service its debt than 51% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 10, meaning the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. Finally, Refinancing is at a rank of 1 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 6 (worse than 94% compared with alternatives), Ero Copper has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Ero Copper Below-Average Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 69 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| COMBINED | ||||||||
| COMBINED | 25 |
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ANALYSIS: With an Obermatt Combined Rank of 25 (worse than 75% compared with investment alternatives), Ero Copper (Copper, Canada) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Ero Copper are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives), show above-average growth (Growth Rank of 69) but are riskily financed (Safety Rank of 6), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 25, is a hold recommendation based on Ero Copper's financial characteristics. As the company Ero Copper's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 54) and above-average growth (Obermatt Growth Rank of 69), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 6) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. 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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