April 18, 2024
Top 10 Stock Pampa Hold 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: Pampa – Top 10 Stock in Mercado de Valores de Buenos Aires Index MERVAL
Pampa is listed as a top 10 stock on April 18, 2024 in the market index MERVAL because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 29 (29% performer), Obermatt assesses an overall hold recommendation for Pampa on April 18, 2024.
Snapshot: Obermatt Ranks
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 Pampa Hold
| 360 METRICS | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 29 |
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ANALYSIS: With an Obermatt 360° View of 29 (better than 29% compared with alternatives), overall professional sentiment and financial characteristics for the stock Pampa are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Pampa. The consolidated Sentiment Rank has a good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 75 or better than 75% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 24, meaning that the share price of Pampa is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 19. ...read more
RECOMMENDATION: With a consolidated 360° View of 29, Pampa is worse than 71% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 54) and safe financing practices (Safety Rank of 75), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Pampạ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Pampa positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock Pampa is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Pampa. Analyst Opinions are at a rank of 51 (better than 51% 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 50, 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 Pampa. Finally, the Professional Investors rank is 70, which means that currently, professional investors hold more stock in this company than in 70% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), Pampa has a reputation among professional investors that is above-average compared with 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 29, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 71% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Pampa 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: Pampa Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 24 (worse than 76% compared with alternatives), Pampa shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Pampa. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 86, which means that the stock price is lower compared with invested capital than for 86% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 40 which means the stock price compared with what market professionals expect for future profits is higher than 60% of comparable companies, indicating a low value concerning Pampa's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 86 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 24, is a sell recommendation based on Pampa's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Pampa, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. ...read more
Growth Strategy: Pampa Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 19 (better than 19% compared with alternatives), Pampa 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 three out of four indicators below average for Pampa. Sales Growth has a below market rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors. The same is valid for Capital Growth, with a rank of 12, and Profit Growth, with a rank of 14. Currently, professionals expect the company to grow its profits less than 86% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 89, which means that the stock returns have recently been above 89% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 19, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Pampa, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Pampa Debt Financing Safety very solid
| SAFETY METRICS | April 18, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 85 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 57 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 75 |
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ANALYSIS: With an Obermatt Safety Rank of 75 (better than 75% compared with alternatives) for 2024, the company Pampa has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Pampa 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 Pampa. Leverage is at 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Refinancing is at a rank of 85, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Finally, Liquidity is also good at a rank of 57, which means that the company generates more profit to service its debt than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 75 (better than 75% compared with alternatives), Pampa 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: Pampa Lowest Financial Performance
| COMBINED PERFORMANCE | April 18, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 24 |
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| GROWTH | ||||||||
| GROWTH | 19 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Pampa (Electric Utilities, Argentina) shares have lower financial characteristics compared with similar stocks. Shares of Pampa are low in value (priced high) with a consolidated Value Rank of 24 (worse than 76% of alternatives) and show below-average growth (Growth Rank of 19) but are safely financed (Safety Rank of 75), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Pampa's financial characteristics. As the company Pampa's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 24) and low growth (Obermatt Growth Rank of 19), 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 75) 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. ...read more
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