Fact based stock research
Weg (BOVESPA:WEGE3)

BRWEGEACNOR0

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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.

Weg stock research in summary

weg.net

ANALYSIS: With an Obermatt Combined Rank of 26 (worse than 74% compared with investment alternatives), Weg (Electr. Components & Equipment, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Weg are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives), and are riskily financed (Safety Rank of 34, which means above-average debt burdens) but show above-average growth (Growth Rank of 63). ...read more

RECOMMENDATION: A Combined Rank of 26, is a hold recommendation based on Weg's financial characteristics. As the company Weg shows low value with an Obermatt Value Rank of 27 (73% 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 63% of comparable companies (Obermatt Growth Rank is 63). 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 34 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 Weg, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	27
Growth Rank	63
Safety Rank	34
Combined Rank	26

Country	Brazil
Industry	Electr. Components & Equipment
Index	BOVESPA, Independent Boards Growth Markets
Size class	X-Large

23-Jan-2025. Stock data may be delayed. Log in or sign up to get the most recent research.

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Research History: Weg

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	42	25	34	27
GROWTH
GROWTH	72	63	51	63
SAFETY
SAFETY	66	36	42	34
SENTIMENT
SENTIMENT	n/a	87	83	^new
360° VIEW
360° VIEW	n/a	43	58	^new

Most recent update of the stock research: 23-Jan-2025. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Weg is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	42	25	34	27
GROWTH
GROWTH	72	63	51	63
SAFETY
SAFETY	66	36	42	34
COMBINED
COMBINED	63	27	21	26

Last update of combined financial performance: 23-Jan-2025. Stock analysis on combined financial performance: The higher the rank of Weg the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Weg 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 Weg. Price-to-Profit (also referred to as price-earnings, P/E) is 52 which means that the stock price compared with what market professionals expect for future profits is lower than for 52% of comparable companies, indicating a good value concerning Weg'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 14, which means that the stock price is lower as regards to invested capital than for 14% of comparable investments. On the other hand, Price-to-Sales is less favorable than 75% of alternatives (only 25% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 37% 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 27, is a hold recommendation based on Weg'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. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	27	27	35	25
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	62	31	50	52
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	22	21	14
DIVIDEND YIELD
DIVIDEND YIELD	69	50	65	63
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	42	25	34	27

Last update of Value Rank: 23-Jan-2025. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Weg; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Weg shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Weg. Sales Growth has a rank of 88 which means that currently professionals expect the company to grow more than 88% of its competitors. Stock Returns are also above average with a rank of 91. But Capital Growth has only a rank of 7, which means that currently professionals expect the company to grow its invested capital less than 93% of its competitors. Profit Growth is also low, with a rank of only 31, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 91% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	73	51	79	88
PROFIT GROWTH
PROFIT GROWTH	n/a	64	72	31
CAPITAL GROWTH
CAPITAL GROWTH	n/a	85	1	7
STOCK RETURNS
STOCK RETURNS	46	11	31	91
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	72	63	51	63

Last update of Growth Rank: 23-Jan-2025. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Weg.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Weg 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 Weg 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 two out of three indicators above average for Weg. Leverage is at a rank of 56, meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors. Liquidity is also good at a rank of 74, meaning the company generates more profit to service its debt than 74% 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 15, 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 85% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Weg has a financing structure that is riskier 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 Weg. 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. Investors may have a short-term debt challenge with Weg and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	46	54	50	56
REFINANCING
REFINANCING	29	30	32	15
LIQUIDITY
LIQUIDITY	93	60	75	74
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	66	36	42	34

Last update of Safety Rank: 23-Jan-2025. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Weg and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	18	33	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	79	72	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	95	96	^new
MARKET PULSE
MARKET PULSE	n/a	73	72	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	87	83	^new

Last update of Sentiment Rank: 23-Jan-2025. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Weg.
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