June 8, 2023
Top 10 Stock Colbún 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: Colbún – Top 10 Stock in Low Waste Leaders
Colbún is listed as a top 10 stock on June 08, 2023 in the market index Low Waste 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, despite a currently slow growth momentum. Based on the Obermatt 360° View of 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for Colbún on June 08, 2023.
Snapshot: Obermatt Ranks
| Country | Chile |
| Industry | Power Producers & Traders |
| Index | IPSA, Low Emissions, Human Rights, Low Waste, Recycling |
| 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° Assessment Colbún Strong Buy
| 360 METRICS | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 8 |
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| SAFETY | ||||||||
| SAFETY | 96 |
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| SENTIMENT | ||||||||
| SENTIMENT | 91 |
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| 360° VIEW | ||||||||
| 360° VIEW | 80 |
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ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Colbún are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators below and half above average for Colbún. The consolidated Value Rank has an attractive rank of 54, which means that the share price of Colbún is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 54% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 96. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 91. But the consolidated Growth Rank has a low rank of 8, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 92 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 80, Colbún is better positioned than 80% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 54), secure financing practices (Safety Rank of 96), and positive market sentiment in the professional investor community (Sentiment Rank of 91). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 8), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Colbún is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Colbún very positive
ANALYSIS: With an Obermatt Sentiment Rank of 91 (better than 91% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Colbún is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Colbún. Analyst Opinions are at a rank of 37 (worse than 63% 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 62, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Colbún. Even better, the Professional Investors rank is 87, meaning that professional investors hold more stock in this company than in 87% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 78, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 78% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 91 (more positive than 91% compared with investment alternatives), Colbún 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: Colbún Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), Colbún 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 Colbún. Expected dividend yields are higher than for 84% of comparable companies (a Dividend Yield rank of 84), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 37 which means that the stock price compared with what market professionals expect for future profits is higher than for 63% of comparable companies, indicating a low value concerning Colbún's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Colbún with a rank of 32. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 68% of comparable companies, indicating a low value concerning Colbún's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a BUY recommendation based on Colbún's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Colbún may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Colbún Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 8 (better than 8% compared with alternatives), Colbún 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 three out of four indicators below average for Colbún. Sales Growth has a below market rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors. The same is valid for Capital Growth, with a rank of 6, and Profit Growth, with a rank of 32. Currently, professionals expect the company to grow its profits less than 68% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 87, which means that the stock returns have recently been above 87% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a SELL recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Colbún, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Colbún Debt Financing Safety very solid
| SAFETY METRICS | June 8, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 59 |
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| REFINANCING | ||||||||
| REFINANCING | 92 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 96 |
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ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2023, the company Colbún has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Colbún 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, where all three are above average for Colbún. Leverage is at 59, meaning the company has a below-average debt-to-equity ratio. It has less debt than 59% of its competitors. Refinancing is at a rank of 92, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 92% of its competitors. Finally, Liquidity is also good at a rank of 80, which means that the company generates more profit to service its debt than 80% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives), Colbún has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Colbún Above-Average Financial Performance
| COMBINED PERFORMANCE | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 8 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| COMBINED | ||||||||
| COMBINED | 57 |
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ANALYSIS: With an Obermatt Combined Rank of 57 (better than 57% compared with investment alternatives), Colbún (Power Producers & Traders, Chile) shares have above-average financial characteristics compared with similar stocks. Shares of Colbún are a good value (attractively priced) with a consolidated Obermatt Value Rank of 54 (better than 54% of alternatives), are safely financed (Safety Rank of 96, which means low debt burdens), but show below-average growth (Growth Rank of 8). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 57, is a buy recommendation based on Colbún's financial characteristics. As the company Colbún's key financial metrics exhibit good value (Obermatt Value Rank of 54) but low growth (Obermatt Growth Rank of 8) while being safely financed (Obermatt Safety Rank of 96), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 54% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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