June 15, 2023
Top 10 Stock RWE 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: RWE – Top 10 Stock in Nuclear Energy
RWE is listed as a top 10 stock on June 15, 2023 in the market index Nuclear 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 negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 28 (28% performer), Obermatt assesses an overall hold recommendation for RWE on June 15, 2023.
Snapshot: Obermatt Ranks
| Country | Germany |
| Industry | Power Producers & Traders |
| Index | CDAX, DAX 40, Low Emissions, Diversity Europe, Nuclear, Water Tech |
| Size class | XX-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 RWE Hold
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 74 |
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| SENTIMENT | ||||||||
| SENTIMENT | 21 |
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| 360° VIEW | ||||||||
| 360° VIEW | 28 |
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ANALYSIS: With an Obermatt 360° View of 28 (better than 28% compared with alternatives), overall professional sentiment and financial characteristics for the stock RWE are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for RWE. The consolidated Value Rank has an attractive rank of 73, which means that the share price of RWE 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 73% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 74. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 21. Professional investors are more confident in 79% other stocks. The consolidated Growth Rank also has a low rank of 5, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 95 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 28, RWE is worse than 72% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 73), and the financing structure is on the safer side (Safety Rank of 74). However, sentiment in the professional investor community is below-average (Sentiment Rank of 21), as is the growth momentum for the company (Growth Rank of 5). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still 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 RWE negative
ANALYSIS: With an Obermatt Sentiment Rank of 21 (better than 21% compared with alternatives), overall professional sentiment and engagement for the stock RWE is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for RWE. Analyst Opinions are at a rank of 81 (better than 81% 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 and has a rank of 64 which means that currently, stock research experts are getting even more optimistic about investments in RWE. But Market Pulse has a low rank of 8, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 92% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 8, which means that, currently, professional investors hold less stock in this company than in 92% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 21 (less encouraging than 79% compared with investment alternatives), RWE has a reputation among professional investors that is far below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: RWE Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 73 (better than 73% compared with alternatives), RWE 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 RWE. Price-to-Sales (P/S) is 66, which means that the stock price compared with what market professionals expect for future sales is lower than for 66% of comparable companies, indicating a good value regarding RWE's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 69% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 92. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 34% of all competitors have even lower dividend yields than RWE (a Dividend Yield Rank of 34). 66% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 73, is a BUY recommendation based on RWE's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: RWE Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 5 (better than 5% compared with alternatives), RWE 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 RWE. Sales Growth has a below market rank of 12, which means that, currently, professionals expect the company to grow less than 88% of its competitors. The same is valid for Capital Growth, with a rank of 13, and Profit Growth, with a rank of 36. Currently, professionals expect the company to grow its profits less than 64% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 67, which means that the stock returns have recently been above 67% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 5, 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 RWE, 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: RWE Debt Financing Safety above-average
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 83 |
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| REFINANCING | ||||||||
| REFINANCING | 98 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 8 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 74 |
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ANALYSIS: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), the company RWE 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 RWE 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 RWE.Leverage is at 83, meaning the company has a below-average debt-to-equity ratio. It has less debt than 83% of its competitors.Refinancing is at a rank of 98, 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 98% of its competitors. Liquidity is at 8, meaning that the company generates less profit to service its debt than 92% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 74 (better than 74% compared with alternatives), RWE 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: RWE Below-Average Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 73 |
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| GROWTH | ||||||||
| GROWTH | 5 |
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| SAFETY | ||||||||
| SAFETY | 8 |
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| COMBINED | ||||||||
| COMBINED | 49 |
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ANALYSIS: With an Obermatt Combined Rank of 49 (worse than 51% compared with investment alternatives), RWE (Power Producers & Traders, Germany) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of RWE are a good value (attractively priced) with a consolidated Obermatt Value Rank of 73 (better than 73% of alternatives), are safely financed (Safety Rank of 74, which means low debt burdens), but show below-average growth (Growth Rank of 5). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 49, is a hold recommendation based on RWE's financial characteristics. As the company RWE's key financial metrics exhibit good value (Obermatt Value Rank of 73) but low growth (Obermatt Growth Rank of 5) while being safely financed (Obermatt Safety Rank of 74), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 73% 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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