September 28, 2023
Top 10 Stock Metalurgica Gerdau Hold 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: Metalurgica Gerdau – Top 10 Stock in Water Efficiency Leaders
Metalurgica Gerdau is listed as a top 10 stock on September 28, 2023 in the market index Water Efficiency because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for Metalurgica Gerdau on September 28, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Steel |
| Index | BOVESPA, Water Efficiency |
| Size class | XX-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 Metalurgica Gerdau Hold
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 90 |
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| SENTIMENT | ||||||||
| SENTIMENT | 12 |
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| 360° VIEW | ||||||||
| 360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% compared with alternatives), overall professional sentiment and financial characteristics for the stock Metalurgica Gerdau are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Metalurgica Gerdau. The consolidated Value Rank has an attractive rank of 63, which means that the share price of Metalurgica Gerdau 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 63% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 90. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 12. Professional investors are more confident in 88% other stocks. The consolidated Growth Rank also has a low rank of 25, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 75 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, Metalurgica Gerdau is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 63), and the financing structure is on the safer side (Safety Rank of 90). However, sentiment in the professional investor community is below-average (Sentiment Rank of 12), as is the growth momentum for the company (Growth Rank of 25). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Metalurgica Gerdau negative
ANALYSIS: With an Obermatt Sentiment Rank of 12 (better than 12% compared with alternatives), overall professional sentiment and engagement for the stock Metalurgica Gerdau is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Metalurgica Gerdau. Analyst Opinions are at a rank of 43 (worse than 57% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 2, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 2, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 98% of competitors). On the upside, the Professional Investors rank is 67, which means that professional investors hold more stock in this company than in 67% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 12 (less encouraging than 88% compared with investment alternatives), Metalurgica Gerdau has a reputation among professional investors that is far below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Metalurgica Gerdau stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Metalurgica Gerdau Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Metalurgica Gerdau 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 Metalurgica Gerdau. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 87 which means that the stock price compared with what market professionals expect for future profits is lower than for 87% of comparable companies, indicating a good value concerning Metalurgica Gerdau'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 88, and for Dividend Yield with a Dividend Yield Rank of 79. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 83% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 17). 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 Metalurgica Gerdau'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 Metalurgica Gerdau 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 Metalurgica Gerdau shares. ...read more
Growth Strategy: Metalurgica Gerdau Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 25 (better than 25% compared with alternatives), Metalurgica Gerdau 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 Metalurgica Gerdau. Capital Growth has a rank of 79, which means that currently professionals expect the company to grow its invested capital more than 8% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 59 (above 59% of alternative investments). But Sales Growth has only a rank of 1, which means that, currently, professionals expect the company to grow less than 99% of its competitors, and Profit Growth is also low at a rank of 8. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 25, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Metalurgica Gerdau, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Metalurgica Gerdau Debt Financing Safety very solid
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 60 |
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| REFINANCING | ||||||||
| REFINANCING | 99 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 90 |
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ANALYSIS: With an Obermatt Safety Rank of 90 (better than 90% compared with alternatives) for 2023, the company Metalurgica Gerdau has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Metalurgica Gerdau 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 Metalurgica Gerdau. Leverage is at 60, meaning the company has a below-average debt-to-equity ratio. It has less debt than 60% of its competitors. Refinancing is at a rank of 99, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 99% of its competitors. Finally, Liquidity is also good at a rank of 61, which means that the company generates more profit to service its debt than 61% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 90 (better than 90% compared with alternatives), Metalurgica Gerdau 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: Metalurgica Gerdau Top Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 63 |
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| GROWTH | ||||||||
| GROWTH | 25 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 78 |
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ANALYSIS: With an Obermatt Combined Rank of 78 (better than 78% compared with investment alternatives), Metalurgica Gerdau (Steel, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Metalurgica Gerdau are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), are safely financed (Safety Rank of 90, which means low debt burdens), but show below-average growth (Growth Rank of 25). ...read more
RECOMMENDATION: A Combined Rank of 78, is a strong buy recommendation based on Metalurgica Gerdau's financial characteristics. As the company Metalurgica Gerdau's key financial metrics exhibit good value (Obermatt Value Rank of 63) but low growth (Obermatt Growth Rank of 25) while being safely financed (Obermatt Safety Rank of 90), 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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