December 28, 2023
Top 10 Stock Enerplus Buy Recommendation

Latest Research

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 Enerplus Buy

360 METRICS	December 28, 2023
VALUE
VALUE	48
GROWTH
GROWTH	43
SAFETY
SAFETY	72
SENTIMENT
SENTIMENT	65
360° VIEW
360° VIEW	65

ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock Enerplus are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Enerplus. The consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 72 or better than 72% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 48, meaning that the share price of Enerplus is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 43. ...read more

RECOMMENDATION: With a consolidated 360° View of 65, Enerplus is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 65) and safe financing practices (Safety Rank of 72), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Enerpluṣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more

---

Sentiment Strategy: Professional Market Sentiment for Enerplus positive

SENTIMENT METRICS	December 28, 2023
ANALYST OPINION
ANALYST OPINION	64
OPINIONS CHANGE
OPINIONS CHANGE	50
PRO HOLDINGS
PRO HOLDINGS	73
MARKET PULSE
MARKET PULSE	38
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	65

ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Enerplus is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator 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. In addition, Analyst Opinions Change has a rank of 50, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Enerplus. Finally, the Professional Investors rank is 73, which means that currently, professional investors hold more stock in this company than in 73% of alternative investment opportunities. ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Enerplus has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 38, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 62% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Enerplus is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more

---

Value Strategy: Enerplus Stock Price Value below-average critical

VALUE METRICS	December 28, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	57
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	84
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	15
DIVIDEND YIELD
DIVIDEND YIELD	39
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	48

ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Enerplus shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Enerplus. Price-to-Sales (P/S) is 57, which means that the stock price compared with what market professionals expect for future sales is lower than for 57% of comparable companies, indicating a good value concerning Enerplus's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 84% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 39 (dividends are expected to be higher than for 39% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 85% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Enerplus to 15. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Enerplus's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more

---

Growth Strategy: Enerplus Growth Momentum low

GROWTH METRICS	December 28, 2023
REVENUE GROWTH
REVENUE GROWTH	58
PROFIT GROWTH
PROFIT GROWTH	50
CAPITAL GROWTH
CAPITAL GROWTH	55
STOCK RETURNS
STOCK RETURNS	33
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	43

ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Enerplus 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 Enerplus. Sales Growth has a value of 58 which means that currently professionals expect the company to grow more than 58% of its competitors. Profit Growth with a value of 50 and Capital Growth with a rank of 55 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 33, which means that stock returns have recently been below 67% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. Enerplus has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Enerplus, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more

---

Safety Strategy: Enerplus Debt Financing Safety above-average

SAFETY METRICS	December 28, 2023
LEVERAGE
LEVERAGE	76
REFINANCING
REFINANCING	42
LIQUIDITY
LIQUIDITY	89
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	72

ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% 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 42, 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 58% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% 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 Above-Average Financial Performance

COMBINED PERFORMANCE	December 28, 2023
VALUE
VALUE	48
GROWTH
GROWTH	43
SAFETY
SAFETY	89
COMBINED
COMBINED	56

ANALYSIS: With an Obermatt Combined Rank of 56 (better than 56% compared with investment alternatives), Enerplus (Oil & Gas Production, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Enerplus are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 72), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 56, is a buy recommendation based on Enerplus's financial characteristics. As the company Enerplus's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 48) and low growth (Obermatt Growth 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. In this case, good financing practices (Obermatt Safety Rank of 72) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more

Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.