September 14, 2023
Top 10 Stock Acciona Hold Recommendation

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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 Acciona Hold

360 METRICS	September 14, 2023
VALUE
VALUE	35
GROWTH
GROWTH	23
SAFETY
SAFETY	61
SENTIMENT
SENTIMENT	63
360° VIEW
360° VIEW	41

ANALYSIS: With an Obermatt 360° View of 41 (better than 41% compared with alternatives), overall professional sentiment and financial characteristics for the stock Acciona are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Acciona. The consolidated Sentiment Rank has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 61 or better than 61% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 35, meaning that the share price of Acciona is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 23. ...read more

RECOMMENDATION: With a consolidated 360° View of 41, Acciona is worse than 59% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 63) and safe financing practices (Safety Rank of 61), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Accionạ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

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Sentiment Strategy: Professional Market Sentiment for Acciona positive

SENTIMENT METRICS	September 14, 2023
ANALYST OPINION
ANALYST OPINION	39
OPINIONS CHANGE
OPINIONS CHANGE	56
PRO HOLDINGS
PRO HOLDINGS	29
MARKET PULSE
MARKET PULSE	87
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	63

ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Acciona is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Acciona. Analyst Opinions are at a rank of 39 (worse than 61% 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 56 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Acciona. Market Pulse is also positive with a rank of 87, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 87% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 29, which means that professional investors hold less stock in this company than in 71% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Acciona has a reputation among professional investors that is above-average compared with that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more

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Value Strategy: Acciona Stock Price Value below-average critical

VALUE METRICS	September 14, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	52
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	39
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	54
DIVIDEND YIELD
DIVIDEND YIELD	42
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	35

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Acciona shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Acciona. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value concerning Acciona's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 54% of alternatives (46% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 42 are lower than average (dividends are expected to be lower than 58% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 39, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Acciona's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Acciona may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more

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Growth Strategy: Acciona Growth Momentum negative

GROWTH METRICS	September 14, 2023
REVENUE GROWTH
REVENUE GROWTH	84
PROFIT GROWTH
PROFIT GROWTH	57
CAPITAL GROWTH
CAPITAL GROWTH	27
STOCK RETURNS
STOCK RETURNS	3
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	23

ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Acciona 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 half of the indicators below and half above average for Acciona. Sales Growth has a rank of 84, which means that, currently, professionals expect the company to grow more than 84% of its competitors. Profit Growth with a rank of 57 is also above average. But Capital Growth has only a rank of 27, and Stock Returns with 3 are also below-average. Stock returns for Acciona have recently been below 97% 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. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Acciona. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more

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Safety Strategy: Acciona Debt Financing Safety above-average

SAFETY METRICS	September 14, 2023
LEVERAGE
LEVERAGE	48
REFINANCING
REFINANCING	58
LIQUIDITY
LIQUIDITY	48
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	61

ANALYSIS: With an Obermatt Safety Rank of 61 (better than 61% compared with alternatives), the company Acciona 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 Acciona 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 Acciona and the other two below average. Refinancing is at 58, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 48, meaning the company generates less profit to service its debt than 52% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 61 (better than 61% compared with alternatives), Acciona has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Acciona are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more

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Combined financial peformance: Acciona Lowest Financial Performance

COMBINED PERFORMANCE	September 14, 2023
VALUE
VALUE	35
GROWTH
GROWTH	23
SAFETY
SAFETY	48
COMBINED
COMBINED	20

ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), Acciona (Electric Utilities, Spain) shares have lower financial characteristics compared with similar stocks. Shares of Acciona are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives) and show below-average growth (Growth Rank of 23) but are safely financed (Safety Rank of 61), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 20, is a sell recommendation based on Acciona's financial characteristics. As the company Acciona's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 35) and low growth (Obermatt Growth Rank of 23), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 61) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

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