March 14, 2024
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 Customer Satisfaction Leaders in Europe
Snam is listed as a top 10 stock on March 14, 2024 in the market index Customer Focus EU because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 72 (high 72% performer), Obermatt assesses an overall buy recommendation for Snam on March 14, 2024.
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 | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 78 |
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| 360° VIEW | ||||||||
| 360° VIEW | 72 |
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ANALYSIS: With an Obermatt 360° View of 72 (better than 72% 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 all but one indicator above average for Snam. The consolidated Growth Rank has a good rank of 79, 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. This means that growth is higher than for 79% of competitors in the same industry. The consolidated Safety Rank at 53 means that the company has a financing structure that is safer than 53% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 78, which means that professional investors are more optimistic about the stock than for 78% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 40, meaning that the share price of Snam is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 60% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 72, Snam is better positioned than 72% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 79), a safe financing structure (Safety Rank of 53), and positive professional market sentiment (Sentiment Rank of 78), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the 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 growth rank measures the growth momentum of the company (79% better than peers). The value rank could be the reverse reflection of that (21%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Snam very positive
ANALYSIS: With an Obermatt Sentiment Rank of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Snam is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Snam. Analyst Opinions are at a rank of 35 (worse than 65% 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 66, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Snam. Even better, the Professional Investors rank is 72, meaning that professional investors hold more stock in this company than in 72% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 77, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 78 (more positive than 78% compared with investment alternatives), Snam has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Snam Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 40 (worse than 60% 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 63 which means that the stock price compared with what market professionals expect for future profits is lower than for 63% 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 28, which means that the stock price is lower as regards to invested capital than for 28% of comparable investments. On the other hand, Price-to-Sales is less favorable than 78% of alternatives (only 22% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 26% 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 40, 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 79 (better than 79% compared with alternatives) for 2024, 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 63 which means that currently, professionals expect the company to grow more than 63% of its competitors. Capital Growth is also above 34% of competitors with a rank of 91, and Stock Returns with the rank of 58 is also an outperformance. Only Profit Growth is low with a rank of 34 which means that currently, professionals expect the company to grow its profits less than 66% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 79, 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 above-average
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 39 |
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| REFINANCING | ||||||||
| REFINANCING | 17 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 84 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Snam 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 Snam 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, with just one indicator above average for Snam. Liquidity is at 84, meaning the company generates more profit to service its debt than 84% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 17, 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 83% of its competitors. Leverage is also high at a rank of 39, which means that the company has an above-average debt-to-equity ratio. It has more debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Snam has a financing structure that is safer 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 | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 40 |
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| GROWTH | ||||||||
| GROWTH | 79 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| COMBINED | ||||||||
| COMBINED | 67 |
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ANALYSIS: With an Obermatt Combined Rank of 67 (better than 67% 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 40 (worse than 60% of alternatives). But they show above-average growth (Growth Rank of 79) and are safely financed (Safety Rank of 53, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 67, is a buy recommendation based on Snam's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Snam exhibits low value (Obermatt Value Rank of 40), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 79). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 53) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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