August 17, 2023
Top 10 Stock Vale 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: Vale – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
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Vale is listed as a top 10 stock on August 17, 2023 in the market index BOVESPA because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 51 (high 51% performer), Obermatt assesses an overall buy recommendation for Vale on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Steel |
| Index | BOVESPA, Low Emissions, Energy Efficient, Good Governace Growth Markets, Human Rights |
| 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 Vale Buy
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 63 |
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| SENTIMENT | ||||||||
| SENTIMENT | 67 |
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| 360° VIEW | ||||||||
| 360° VIEW | 51 |
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ANALYSIS: With an Obermatt 360° View of 51 (better than 51% compared with alternatives), overall professional sentiment and financial characteristics for the stock Vale are above average. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Vale. The consolidated Value Rank has an attractive rank of 58, which means that the share price of Vale is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 58% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 63. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 67. But the consolidated Growth Rank has a low rank of 23, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 77 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 51, Vale is better positioned than 51% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 58), secure financing practices (Safety Rank of 63), and positive market sentiment in the professional investor community (Sentiment Rank of 67). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 23), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Vale is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Vale positive
ANALYSIS: With an Obermatt Sentiment Rank of 67 (better than 67% compared with alternatives), overall professional sentiment and engagement for the stock Vale is above average. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Vale. 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. The Professional Investors rank is also good at 61, which means that currently, professional investors hold more stock in this company than in 61% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 76 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 76% of competitors). But Analyst Opinions Change has a below-average rank of 32, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Vale. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 67 (more positive than 67% compared with investment alternatives), Vale has a reputation among professional investors that is above-average compared with that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Vale Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 58 (better than 58% compared with alternatives), Vale 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 Vale. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 91 which means that the stock price compared with what market professionals expect for future profits is lower than for 91% of comparable companies, indicating a good value concerning Vale's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 54, and for Dividend Yield with a Dividend Yield Rank of 84. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 62% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 38). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 58, is a buy recommendation based on Vale's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Vale has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Vale shares. ...read more
Growth Strategy: Vale Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Vale 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 Vale. Only Capital Growth has a good rank of 64, which means that currently professionals expect the company to grow its invested capital more than 6% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 34 which means that currently professionals expect the company to grow less than 66% of its competitors. Profit Growth with a rank of 6 and Stock Returns with a rank of 41 are also low (below 59% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Vale is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Vale Debt Financing Safety above-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 54 |
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| REFINANCING | ||||||||
| REFINANCING | 24 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 78 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 63 |
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ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Vale 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 Vale 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 two out of three indicators above average for Vale. Leverage is at a rank of 54, meaning the company has a below-average debt-to-equity ratio. It has less debt than 54% of its competitors. Liquidity is also good at a rank of 78, meaning the company generates more profit to service its debt than 78% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 24, 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 76% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 63 (better than 63% compared with alternatives), Vale has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Vale. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Vale Below-Average Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 58 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 78 |
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| COMBINED | ||||||||
| COMBINED | 37 |
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ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Vale (Steel, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Vale are a good value (attractively priced) with a consolidated Value Rank of 58 (better than 58% of alternatives), are safely financed (Safety Rank of 63, which means low debt burdens), but show below-average growth (Growth Rank of 23). ...read more
RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Vale's financial characteristics. As the company Vale's key financial metrics exhibit good value (Obermatt Value Rank of 58) but low growth (Obermatt Growth Rank of 23) while being safely financed (Obermatt Safety Rank of 63), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 58% 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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