September 7, 2023
Top 10 Stock Pampa 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: Pampa – Top 10 Stock in Mercado de Valores de Buenos Aires Index MERVAL
Pampa is listed as a top 10 stock on September 07, 2023 in the market index MERVAL 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 39 (39% performer), Obermatt assesses an overall hold recommendation for Pampa on September 07, 2023.
Snapshot: Obermatt Ranks
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 Pampa Hold
| 360 METRICS | September 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 66 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| SENTIMENT | ||||||||
| SENTIMENT | 53 |
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| 360° VIEW | ||||||||
| 360° VIEW | 39 |
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ANALYSIS: With an Obermatt 360° View of 39 (better than 39% compared with alternatives), overall professional sentiment and financial characteristics for the stock Pampa are below the industry average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Pampa. The consolidated Growth Rank has a good rank of 66, 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 66% of competitors in the same industry. The consolidated Safety Rank at 55 means that the company has a financing structure that is safer than 55% 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 53, which means that professional investors are more optimistic about the stock than for 53% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 14, meaning that the share price of Pampa is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 86% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 39, Pampa is worse 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 above-average growth (Growth Rank of 66), a safe financing structure (Safety Rank of 55), and positive professional market sentiment (Sentiment Rank of 53), 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 Pampa compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (66% better than peers). The value rank could be the reverse reflection of that (34%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Pampa positive
ANALYSIS: With an Obermatt Sentiment Rank of 53 (better than 53% compared with alternatives), overall professional sentiment and engagement for the stock Pampa is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Pampa. Analyst Opinions are at a rank of 24 (worse than 76% 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 86, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Pampa. More encouragingly, the Professional Investors rank is 50, which means that professional investors hold more stock in this company than in 50% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 47, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 53 (more positive than 53% compared with investment alternatives), Pampa has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for Pampa. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Pampa Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 14 (worse than 86% compared with alternatives), Pampa shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Pampa. Price-to-Sales is 22 which means that the stock price compared with what market professionals expect for future profits is higher than 78% of comparable companies, indicating a low value concerning Pampa's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 22, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Pampa. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 36 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 14, is a sell recommendation based on Pampa's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Pampa? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Pampa? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Pampa may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Pampa Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 66 (better than 66% compared with alternatives), Pampa shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Pampa. Sales Growth has a rank of 94 which means that currently professionals expect the company to grow more than 94% of its competitors. Stock Returns are also above average with a rank of 95. But Capital Growth has only a rank of 34, which means that currently professionals expect the company to grow its invested capital less than 66% of its competitors. Profit Growth is also low, with a rank of only 4, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 66, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 95% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Pampa Debt Financing Safety above-average
| SAFETY METRICS | September 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 53 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 51 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 55 |
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ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Pampa 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 Pampa 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 Pampa. Leverage is at 53, meaning the company has a below-average debt-to-equity ratio. It has less debt than 53% of its competitors. Refinancing is at a rank of 64, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Finally, Liquidity is also good at a rank of 51, which means that the company generates more profit to service its debt than 51% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Pampa has a financing structure that is 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: Pampa Below-Average Financial Performance
| COMBINED PERFORMANCE | September 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 14 |
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| GROWTH | ||||||||
| GROWTH | 66 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| COMBINED | ||||||||
| COMBINED | 34 |
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ANALYSIS: With an Obermatt Combined Rank of 34 (worse than 66% compared with investment alternatives), Pampa (Electric Utilities, Argentina) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Pampa are low in value (priced high) with a consolidated Value Rank of 14 (worse than 86% of alternatives). But they show above-average growth (Growth Rank of 66) and are safely financed (Safety Rank of 55, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 34, is a hold recommendation based on Pampa's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Pampa exhibits low value (Obermatt Value Rank of 14), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 66). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 55) 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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