October 19, 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 Indice de Precio Selectivo de Acciones
Colbún is listed as a top 10 stock on October 19, 2023 in the market index IPSA 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 94 (top 94% performer), Obermatt assesses an overall strong buy recommendation for Colbún on October 19, 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° View Colbún Strong Buy
| 360 METRICS | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| SENTIMENT | ||||||||
| SENTIMENT | 84 |
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| 360° VIEW | ||||||||
| 360° VIEW | 94 |
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ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and financial characteristics 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 63, 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 63% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 92. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 84. But the consolidated Growth Rank has a low rank of 45, 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. 55 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 94, Colbún is better positioned than 94% 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 63), secure financing practices (Safety Rank of 92), and positive market sentiment in the professional investor community (Sentiment Rank of 84). 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 45), 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 84 (better than 84% 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 34 (worse than 66% 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 Colbún. Even better, the Professional Investors rank is 88, meaning that professional investors hold more stock in this company than in 88% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 75, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 75% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% 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 63 (better than 63% 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 three out of four indicators above average for Colbún. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 51 which means that the stock price compared with what market professionals expect for future profits is lower than for 51% of comparable companies, indicating a good value concerning Colbún's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 63, and for Dividend Yield with a Dividend Yield Rank of 88. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 63% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 37). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on Colbún's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Colbún has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Colbún shares. ...read more
Growth Strategy: Colbún Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Colbún 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 Colbún. Profit Growth has a rank of 77, which means that currently professionals expect the company to grow its profits more than 77% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has a below the median rank of 6, which means that, currently, professionals expect the company to grow less than 94% of its competitors, and Capital Growth also has a lower rank of 12. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for Colbún. ...read more
Safety Strategy: Colbún Debt Financing Safety very solid
| SAFETY METRICS | October 19, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 92 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
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ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% 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 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% 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 72, which means that the company generates more profit to service its debt than 72% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% 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 Top Financial Performance
| COMBINED PERFORMANCE | October 19, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 45 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| COMBINED | ||||||||
| COMBINED | 88 |
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ANALYSIS: With an Obermatt Combined Rank of 88 (better than 88% compared with investment alternatives), Colbún (Power Producers & Traders, Chile) shares have much better financial characteristics than comparable stocks. Shares of Colbún are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), are safely financed (Safety Rank of 92, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more
RECOMMENDATION: A Combined Rank of 88, is a strong buy recommendation based on Colbún's financial characteristics. As the company Colbún's key financial metrics exhibit good value (Obermatt Value Rank of 63) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 92), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 63% 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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