November 2, 2023
Top 10 Stock Ameren 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: Ameren – Top 10 Stock in SDG 9: Industry, Innovation and Infrastructure
Ameren is listed as a top 10 stock on November 02, 2023 in the market index SDG 9 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Ameren on November 02, 2023.
Snapshot: Obermatt Ranks
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 Ameren Buy
| 360 METRICS | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 43 |
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| SENTIMENT | ||||||||
| SENTIMENT | 100 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Ameren are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Ameren. The consolidated Sentiment Rank has a good rank of 100, which means that professional investors are more optimistic about the stock than for 100% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 17, which means that the share price of Ameren is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 49, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 49% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 43 which means that the company has a riskier financing structure than 57% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Ameren is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 100) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Amereṇ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Ameren very positive
ANALYSIS: With an Obermatt Sentiment Rank of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Ameren is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Ameren. Analyst Opinions are at a rank of 72 (better than 72% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 67, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Ameren. The Professional Investors rank is 97, which means that currently, professional investors hold more stock in this company than in 97% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 82 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 82% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 100 (more positive than 100% compared with investment alternatives), Ameren has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Ameren stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Ameren Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Ameren shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Ameren. Price-to-Sales is 26 which means that the stock price compared with what market professionals expect for future profits is higher than 74% of comparable companies, indicating a low value concerning Ameren's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 33, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Ameren. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 28 and Dividend Yield, which is lower than 83% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Ameren's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Ameren? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Ameren? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Ameren may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Ameren Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Ameren shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Ameren. Profit Growth has a rank of 64 which means that currently professionals expect the company to grow its profits more than 64% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 65, and Stock Returns has a rank of 59 which means that the stock returns have recently been above 59% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 22 (78% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Ameren Debt Financing Safety below-average
| SAFETY METRICS | November 2, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 50 |
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| REFINANCING | ||||||||
| REFINANCING | 37 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 54 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 43 |
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ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Ameren 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 Ameren 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 Ameren. Leverage is at a rank of 50, meaning the company has a below-average debt-to-equity ratio. It has less debt than 50% of its competitors. Liquidity is also good at a rank of 54, meaning the company generates more profit to service its debt than 54% 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 37, 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 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Ameren 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 Ameren. 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: Ameren Lowest Financial Performance
| COMBINED PERFORMANCE | November 2, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 17 |
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| GROWTH | ||||||||
| GROWTH | 49 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| COMBINED | ||||||||
| COMBINED | 15 |
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ANALYSIS: With an Obermatt Combined Rank of 15 (worse than 85% compared with investment alternatives), Ameren (Multi-Utilities, USA) shares have lower financial characteristics compared with similar stocks. Shares of Ameren are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 15, is a sell recommendation based on Ameren's financial characteristics. As the company Ameren's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 17), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 43), 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. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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