August 17, 2023
Top 10 Stock B3 S.A. 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: B3 S.A. – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
B3 S.A. 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. 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 53 (high 53% performer), Obermatt assesses an overall buy recommendation for B3 S.A. on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Financial Exchanges & Data |
| Index | BOVESPA, Independent Boards Growth Markets, R/E Growth Markets |
| 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 B3 S.A. Buy
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 41 |
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| SENTIMENT | ||||||||
| SENTIMENT | 86 |
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| 360° VIEW | ||||||||
| 360° VIEW | 53 |
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ANALYSIS: With an Obermatt 360° View of 53 (better than 53% compared with alternatives), overall professional sentiment and financial characteristics for the stock B3 S.A. are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for B3 S.A.. The consolidated Sentiment Rank has a good rank of 86, which means that professional investors are more optimistic about the stock than for 86% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 37, which means that the share price of B3 S.A. 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 39, 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 39% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 41 which means that the company has a riskier financing structure than 59% 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 53, B3 S.A. is better positioned than 53% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 86) 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 B3 S.A.̣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for B3 S.A. very positive
ANALYSIS: With an Obermatt Sentiment Rank of 86 (better than 86% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock B3 S.A. is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for B3 S.A.. Analyst Opinions are at a rank of 40 (worse than 60% 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 50, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in B3 S.A.. Even better, the Professional Investors rank is 77, meaning that professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 97, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 97% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 86 (more positive than 86% compared with investment alternatives), B3 S.A. has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: B3 S.A. Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), B3 S.A. shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for B3 S.A.. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 80% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than 85% of comparable companies, indicating a low value concerning B3 S.A.'s sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 29 which means that the stock price compared with what market professionals expect for future profit levels is higher than 71% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 23 is also low. Compared with invested capital, the stock price is higher than for 77% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on B3 S.A.'s stock price compared with the company's operational size and dividend yields. Should dividend investors pick B3 S.A.? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose B3 S.A. only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: B3 S.A. Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), B3 S.A. 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 half of the indicators below and half above average for B3 S.A.. Sales Growth has a rank of 54 which means that currently, professionals expect the company to grow more than 54% of its competitors. Capital Growth is also above 18% of competitors with a rank of 87. But Profit Growth only has a rank of 18, which means that currently professionals expect the company to grow its profits less than 82% of its competitors. And Stock Returns have also been below average with a rank of only 43. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: B3 S.A. Debt Financing Safety below-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 52 |
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| REFINANCING | ||||||||
| REFINANCING | 18 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 77 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 41 |
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ANALYSIS: With an Obermatt Safety Rank of 41 (better than 41% compared with alternatives), the company B3 S.A. 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 B3 S.A. 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 B3 S.A.. Leverage is at a rank of 52, meaning the company has a below-average debt-to-equity ratio. It has less debt than 52% of its competitors. Liquidity is also good at a rank of 77, meaning the company generates more profit to service its debt than 77% 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 18, 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 82% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 41 (worse than 59% compared with alternatives), B3 S.A. 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 B3 S.A.. 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: B3 S.A. Lowest Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 37 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| COMBINED | ||||||||
| COMBINED | 18 |
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ANALYSIS: With an Obermatt Combined Rank of 18 (worse than 82% compared with investment alternatives), B3 S.A. (Financial Exchanges & Data, Brazil) shares have lower financial characteristics compared with similar stocks. Shares of B3 S.A. are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 41), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 18, is a sell recommendation based on B3 S.A.'s financial characteristics. As the company B3 S.A.'s key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 37), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 41), 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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