October 5, 2023
Top 10 Stock Adecoagro Strong 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: Adecoagro – Top 10 Stock in Low Emission Leaders
Adecoagro is listed as a top 10 stock on October 05, 2023 in the market index Low Emissions 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. Based on the Obermatt 360° View of 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Adecoagro on October 05, 2023.
Snapshot: Obermatt Ranks
| Country | Luxembourg |
| Industry | Packaged Foods & Meats |
| Index | Low Emissions |
| Size class | 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 Adecoagro Strong Buy
| 360 METRICS | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Adecoagro are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Adecoagro. The consolidated Value Rank has an attractive rank of 69, which means that the share price of Adecoagro is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 69% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 100, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 63. But the company’s financing is risky with a Safety rank of 25. This means 75% of comparable companies have a safer financing structure than Adecoagro. ...read more
RECOMMENDATION: With a consolidated 360° View of 78, Adecoagro is better positioned than 78% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 69), above-average growth (Growth Rank of 100), and positive market sentiment in the professional investor community (Sentiment Rank of 63), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 25), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Adecoagro is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Adecoagro positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Adecoagro is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Adecoagro. Analyst Opinions are at a rank of 32 (worse than 68% 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 85, 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 Adecoagro. More encouragingly, the Professional Investors rank is 83, which means that professional investors hold more stock in this company than in 83% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 15, 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 85% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Adecoagro has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Adecoagro. 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: Adecoagro Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 69 (better than 69% compared with alternatives), Adecoagro shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Adecoagro. Price-to-Profit (also referred to as price-earnings, P/E) is 82 which means that the stock price compared with what market professionals expect for future profits is lower than for 82% of comparable companies, indicating a good value concerning Adecoagro'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 62, which means that the stock price is lower as regards to invested capital than for 62% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 57% of alternatives (only 43% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 59% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 69, is a buy recommendation based on Adecoagro'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 concerning expected revenues, 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 Group or 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 distribute it to shareholders through dividends, 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: Adecoagro Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 100 (better than 100% compared with alternatives) for 2023, Adecoagro 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 four indicators above average for Adecoagro. Sales Growth has a value of 94, which means that, currently, professionals expect the company to grow more than 94% of its competitors. The same is valid for Profit Growth with a value of 73 and for Capital Growth with 94. In addition, Stock Returns had an above-average rank value of 94, which means they have been higher than 94% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 100, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Adecoagro exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: Adecoagro Debt Financing Safety below-average
| SAFETY METRICS | October 5, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 13 |
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| REFINANCING | ||||||||
| REFINANCING | 75 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 6 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 25 |
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ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company Adecoagro 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 Adecoagro 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 Adecoagro and the other two below average. Refinancing is at 75, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. But Leverage is high with a rank of 13, meaning the company has an above-average debt-to-equity ratio. It has more debt than 87% of its competitors. Liquidity is also on the riskier side with a rank of 6, meaning the company generates less profit to service its debt than 94% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 25 (worse than 75% compared with alternatives), Adecoagro has a financing structure that is riskier 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 Adecoagro 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
Combined financial peformance: Adecoagro Top Financial Performance
| COMBINED PERFORMANCE | October 5, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 69 |
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| GROWTH | ||||||||
| GROWTH | 100 |
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| SAFETY | ||||||||
| SAFETY | 6 |
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| COMBINED | ||||||||
| COMBINED | 80 |
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ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Adecoagro (Packaged Foods & Meats, Luxembourg) shares have much better financial characteristics than comparable stocks. Shares of Adecoagro are a good value (attractively priced) with a consolidated Value Rank of 69 (better than 69% of alternatives), show above-average growth (Growth Rank of 100) but are riskily financed (Safety Rank of 25), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 80, is a strong buy recommendation based on Adecoagro's financial characteristics. As the company Adecoagro's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 69) and above-average growth (Obermatt Growth Rank of 100), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 25) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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