August 17, 2023
Top 10 Stock Itausa 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: Itausa – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
Itausa 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. 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. Based on the Obermatt 360° View of 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Itausa on August 17, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Diversified Banks |
| Index | BOVESPA, Human Rights |
| 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 Itausa Buy
| 360 METRICS | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Itausa are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Itausa. The consolidated Value Rank has an attractive rank of 57, which means that the share price of Itausa is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 57% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 81, 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. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 61. But the company’s financing is risky with a Safety rank of 33. This means 67% of comparable companies have a safer financing structure than Itausa. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Itausa is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 57), above-average growth (Growth Rank of 81), and positive market sentiment in the professional investor community (Sentiment Rank of 61), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 33), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Itausa is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Itausa positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Itausa is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Itausa. Analyst Opinions are at a rank of 32 (worse than 68% 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 Itausa. Even better, the Professional Investors rank is 81, meaning that professional investors hold more stock in this company than in 81% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 68, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 68% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Itausa has a reputation among professional investors that is above-average compared with 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: Itausa Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), Itausa 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 Itausa. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 91 which means that the stock price compared with what market professionals expect for future profits is lower than for 91% of comparable companies, indicating a good value concerning Itausa'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 52, and for Dividend Yield with a Dividend Yield Rank of 70. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 82% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 18). 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 57, is a buy recommendation based on Itausa'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 Itausa 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 Itausa shares. ...read more
Growth Strategy: Itausa Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2023, Itausa 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 Itausa. Sales Growth has a rank of 69 which means that currently, professionals expect the company to grow more than 69% of its competitors. Capital Growth is also above 23% of competitors with a rank of 97, and Stock Returns with the rank of 71 is also an outperformance. Only Profit Growth is low with a rank of 23 which means that currently, professionals expect the company to grow its profits less than 77% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, 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 communication about extra growth efforts costing time and money. If that is the case, Itausa is a good growth stock. ...read more
Safety Strategy: Itausa Debt Financing Safety below-average
| SAFETY METRICS | August 17, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 9 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 33 |
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ANALYSIS: With an Obermatt Safety Rank of 33 (better than 33% compared with alternatives), the company Itausa 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 Itausa 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 Itausa. Leverage is at a rank of 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors. Liquidity is also good at a rank of 61, meaning the company generates more profit to service its debt than 61% 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 9, 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 91% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 33 (worse than 67% compared with alternatives), Itausa 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 Itausa. 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: Itausa Above-Average Financial Performance
| COMBINED PERFORMANCE | August 17, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 57 |
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| GROWTH | ||||||||
| GROWTH | 81 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 69 |
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ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), Itausa (Diversified Banks, Brazil) shares have above-average financial characteristics compared with similar stocks. Shares of Itausa are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), show above-average growth (Growth Rank of 81) but are riskily financed (Safety Rank of 33), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on Itausa's financial characteristics. As the company Itausa's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 57) and above-average growth (Obermatt Growth Rank of 81), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 33) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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