August 10, 2023
Top 10 Stock Snam 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: Snam – Top 10 Stock in Milano Italia Borsa Index MIB
Snam is listed as a top 10 stock on August 10, 2023 in the market index MIB because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 66 (high 66% performer), Obermatt assesses an overall buy recommendation for Snam on August 10, 2023.
Snapshot: Obermatt Ranks
| Country | Italy |
| Industry | Gas Utilities |
| Index | MIB, Customer Focus EU, Dividends Europe, Employee Focus EU, Energy Efficient |
| Size class | X-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 Snam Buy
| 360 METRICS | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| SENTIMENT | ||||||||
| SENTIMENT | 48 |
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| 360° VIEW | ||||||||
| 360° VIEW | 66 |
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ANALYSIS: With an Obermatt 360° View of 66 (better than 66% compared with alternatives), overall professional sentiment and financial characteristics for the stock Snam are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Snam. The consolidated Growth Rank has a good rank of 85, 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. It ranks higher than 85% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 46 means that the share price of Snam is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 54% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 43, which means that the company has a riskier financing structure than 57% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 48, indicating professional investors are more pessimistic about the stock than for 52% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 66, Snam is better positioned than 66% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 85), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 48), the company is rather risky when it comes to financing (Safety Rank of 43). The negative market view on Snam may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Snam compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Snam only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Snam is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Snam. Analyst Opinions are at a rank of 31 (worse than 69% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Snam. More encouragingly, the Professional Investors rank is 76, which means that professional investors hold more stock in this company than in 76% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 47, 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 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 48 (less encouraging than 52% compared with investment alternatives), Snam has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Snam. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Snam Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 46 (worse than 54% compared with alternatives), Snam 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 Snam. Price-to-Profit (also referred to as price-earnings, P/E) is 62 which means that the stock price compared with what market professionals expect for future profits is lower than for 62% of comparable companies, indicating a good value concerning Snam's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 32, which means that the stock price is lower as regards to invested capital than for 32% of comparable investments. On the other hand, Price-to-Sales is less favorable than 83% of alternatives (only 17% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 24% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 46, is a hold recommendation based on Snam's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Snam Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 85 (better than 85% compared with alternatives) for 2023, Snam shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Snam. Sales Growth has a rank of 81 which means that currently, professionals expect the company to grow more than 81% of its competitors. Capital Growth is also above 32% of competitors with a rank of 75, and Stock Returns with the rank of 57 is also an outperformance. Only Profit Growth is low with a rank of 32 which means that currently, professionals expect the company to grow its profits less than 68% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 85, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Snam is a good growth stock. ...read more
Safety Strategy: Snam Debt Financing Safety below-average
| SAFETY METRICS | August 10, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 5 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 81 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 43 |
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ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Snam has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Snam 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 just one indicator above average for Snam. Liquidity is at 81, meaning the company generates more profit to service its debt than 81% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 5, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 95% of its competitors. Leverage is also high at a rank of 38, which means that the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Snam has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Snam Above-Average Financial Performance
| COMBINED PERFORMANCE | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 46 |
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| GROWTH | ||||||||
| GROWTH | 85 |
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| SAFETY | ||||||||
| SAFETY | 81 |
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| COMBINED | ||||||||
| COMBINED | 70 |
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ANALYSIS: With an Obermatt Combined Rank of 70 (better than 70% compared with investment alternatives), Snam (Gas Utilities, Italy) shares have above-average financial characteristics compared with similar stocks. Shares of Snam are low in value (priced high) with a consolidated Value Rank of 46 (worse than 54% of alternatives), and are riskily financed (Safety Rank of 43, which means above-average debt burdens) but show above-average growth (Growth Rank of 85). ...read more
RECOMMENDATION: A Combined Rank of 70, is a buy recommendation based on Snam's financial characteristics. As the company Snam shows low value with an Obermatt Value Rank of 46 (54% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 85% of comparable companies (Obermatt Growth Rank is 85). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 43 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Snam, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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