May 18, 2023
Top 10 Stock Enerplus 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: Enerplus – Top 10 Stock in Oil & Gas Mining and Production
Enerplus is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 89 (top 89% performer), Obermatt assesses an overall strong buy recommendation for Enerplus on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Oil & Gas Production |
| Index | Oil & Gas, Water Efficiency, TSX Composite |
| 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 Enerplus Strong Buy
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 73 |
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| SENTIMENT | ||||||||
| SENTIMENT | 83 |
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| 360° VIEW | ||||||||
| 360° VIEW | 89 |
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ANALYSIS: With an Obermatt 360° View of 89 (better than 89% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Enerplus are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Enerplus. The consolidated Growth Rank has a good rank of 87, 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. This means that growth is higher than for 87% of competitors in the same industry. The consolidated Safety Rank at 73 means that the company has a financing structure that is safer than 73 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 83, which means that professional investors are more optimistic about the stock than for 83% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 29, meaning that the share price of Enerplus is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 71% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a 360° View of 89, Enerplus is better than 89% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 87), a safe financing structure (Safety Rank of 73), and positive professional market sentiment (Sentiment Rank of 83), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Enerplus compared with alternatives? You can use the following rule of dumb: The growth rank reflects where the growth momentum of the company is (87% better than peers). The value rank could be the reverse reflection of that (13%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just extrapolates the past, but sometimes they are right. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Enerplus very positive
ANALYSIS: With an Obermatt Sentiment Rank of 83 (better than 83% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Enerplus is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Enerplus. Analyst Opinions are at a rank of 64 (better than 64% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 94, which means that currently, professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 80 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 80% of competitors). But Analyst Opinions Change has a below-average rank of 17, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Enerplus. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 83 (more positive than 83% compared with investment alternatives), Enerplus has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Enerplus Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 29 (worse than 71% compared with alternatives), Enerplus 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 Enerplus. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 73, which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Enerplus's profit levels. But Price-to-Sales is 34 which means that the stock price compared with what market professionals expect for future profits is higher than for 66% of comparable companies, indicating a low value concerning Enerplus'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 18 and for dividend yield, which is lower than for 63% 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 29, is a HOLD recommendation based on Enerplus's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Enerplus is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. ...read more
Growth Strategy: Enerplus Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 87 (better than 87% compared with alternatives) for 2023, Enerplus 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 but one indicator above average for Enerplus. Sales Growth has a rank of 72 which means that currently, professionals expect the company to grow more than 72% of its competitors. Capital Growth is also above 48% of competitors with a rank of 51, and Stock Returns with the rank of 97 is also an outperformance. Only Profit Growth is low with a rank of 48 which means that currently, professionals expect the company to grow its profits less than 52% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 87, is a BUY recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communications about extra growth efforts costing time and money. If that is the case, Enerplus is a good growth stock. ...read more
Safety Strategy: Enerplus Debt Financing Safety above-average
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 76 |
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| REFINANCING | ||||||||
| REFINANCING | 35 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 89 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 73 |
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ANALYSIS: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), the company Enerplus has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Enerplus 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, with two out of three indicators above average for Enerplus. Leverage is at a rank of 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Liquidity is also good at a rank of 89, meaning the company generates more profit to service its debt than 89% 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 35, 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 65% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 73 (better than 73% compared with alternatives), Enerplus has a financing structure that is safer 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 Enerplus. 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: Enerplus Top Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 29 |
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| GROWTH | ||||||||
| GROWTH | 87 |
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| SAFETY | ||||||||
| SAFETY | 89 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), Enerplus (Oil & Gas Production, Canada) shares have much better financial characteristics than comparable stocks. Shares of Enerplus are low in value (priced high) with a consolidated Obermatt Value Rank of 29 (worse than 71% of alternatives). But they show above-average growth (Growth Rank of 87) and are safely financed (Safety Rank of 73, which means below-average debt burdens). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 79, is a strong buy recommendation based on Enerplus's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Enerplus exhibits low value (Obermatt Value Rank of 29), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 87). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 73) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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