September 14, 2023
Top 10 Stock Engie Brasil Energia 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: Engie Brasil Energia – Top 10 Stock in Solar Technology
Engie Brasil Energia is listed as a top 10 stock on September 14, 2023 in the market index Solar Tech 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 below average and thus a signal for caution. Based on the Obermatt 360° View of 37 (37% performer), Obermatt assesses an overall hold recommendation for Engie Brasil Energia on September 14, 2023.
Snapshot: Obermatt Ranks
| Country | Brazil |
| Industry | Renewable Electricity |
| Index | BOVESPA, Low Emissions, Good Governace Growth Markets, Human Rights, Independent Boards Growth Markets, Solar Tech |
| 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 Engie Brasil Energia Hold
| 360 METRICS | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 62 |
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| SAFETY | ||||||||
| SAFETY | 28 |
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| SENTIMENT | ||||||||
| SENTIMENT | 29 |
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| 360° VIEW | ||||||||
| 360° VIEW | 37 |
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ANALYSIS: With an Obermatt 360° View of 37 (better than 37% compared with alternatives), overall professional sentiment and financial characteristics for the stock Engie Brasil Energia are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Engie Brasil Energia. The consolidated Value Rank has an attractive rank of 54, which means that the share price of Engie Brasil Energia 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 54% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 62, 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. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 29. Professional investors are more confident in 71% other stocks. Worryingly, the company has risky financing, with a Safety rank of 28. This means 72% of comparable companies have a safer financing structure than Engie Brasil Energia. ...read more
RECOMMENDATION: With a consolidated 360° View of 37, Engie Brasil Energia is worse than 63% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 54 and the Growth Rank above-average at 62, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 29. In addition, the company financing structure is on the riskier side (Safety Rank of 28). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should 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 Engie Brasil Energia only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 29 (better than 29% compared with alternatives), overall professional sentiment and engagement for the stock Engie Brasil Energia is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Engie Brasil Energia. Analyst Opinions are at a rank of 18 (worse than 82% 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 29, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 60, which means that professional investors hold more stock in this company than in 60% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 72, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 72% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Engie Brasil Energia and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 29 (less encouraging than 71% compared with investment alternatives), Engie Brasil Energia has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Engie Brasil Energia Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 54 (better than 54% compared with alternatives), Engie Brasil Energia shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Engie Brasil Energia. Price-to-Profit (also referred to as price-earnings, P/E) is 84 which means that the stock price compared with what market professionals expect for future profits is lower than for 84% of comparable companies, indicating a good value concerning Engie Brasil Energia'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 12, which means that the stock price is lower as regards to invested capital than for 12% of comparable investments. On the other hand, Price-to-Sales is less favorable than 76% of alternatives (only 24% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 54, is a buy recommendation based on Engie Brasil Energia's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Engie Brasil Energia Growth Momentum good
| GROWTH METRICS | September 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 23 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 54 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 90 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 51 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 62 |
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ANALYSIS: With an Obermatt Growth Rank of 62 (better than 62% compared with alternatives), Engie Brasil Energia 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 all but one indicator above average for Engie Brasil Energia. Profit Growth has a rank of 54 which means that currently professionals expect the company to grow its profits more than 54% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 90, and Stock Returns has a rank of 51 which means that the stock returns have recently been above 51% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 23 (77% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 62, is a buy recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Engie Brasil Energia Debt Financing Safety below-average
| SAFETY METRICS | September 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 11 |
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| REFINANCING | ||||||||
| REFINANCING | 43 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 28 |
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ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Engie Brasil Energia 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 Engie Brasil Energia 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 all three metrics below average for Engie Brasil Energia. Liquidity is at 48, meaning that the company generates less profit to service its debt than 52% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 11, meaning the company has an above-average debt-to-equity ratio. It has more debt than 89% of its competitors. Finally, Refinancing is at a rank of 43 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 57% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Engie Brasil Energia has a financing structure that is riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: Engie Brasil Energia Below-Average Financial Performance
| COMBINED PERFORMANCE | September 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 54 |
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| GROWTH | ||||||||
| GROWTH | 62 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| COMBINED | ||||||||
| COMBINED | 45 |
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ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), Engie Brasil Energia (Renewable Electricity, Brazil) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Engie Brasil Energia are a good value (attractively priced) with a consolidated Value Rank of 54 (better than 54% of alternatives), show above-average growth (Growth Rank of 62) but are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on Engie Brasil Energia's financial characteristics. As the company Engie Brasil Energia's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 54) and above-average growth (Obermatt Growth Rank of 62), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 28) 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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