May 18, 2023
Top 10 Stock Vermilion Energy Strong 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: Vermilion Energy – Top 10 Stock in Oil & Gas Mining and Production
Vermilion Energy is listed as a top 10 stock on May 18, 2023 in the market index Oil & Gas because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance and professional market sentiment is positive, it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 77 (top 77% performer), Obermatt assesses an overall strong buy recommendation for Vermilion Energy on May 18, 2023.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Oil & Gas Production |
| Index | Low Emissions, Oil & Gas, TSX Composite |
| 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° Assessment Vermilion Energy Strong Buy
| 360 METRICS | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 47 |
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| SENTIMENT | ||||||||
| SENTIMENT | 77 |
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| 360° VIEW | ||||||||
| 360° VIEW | 77 |
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ANALYSIS: With an Obermatt 360° View of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Vermilion Energy are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Vermilion Energy. The consolidated Value Rank has an attractive rank of 97, which means that the share price of Vermilion Energy is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 97% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 77, which means that professional investors are more optimistic about the stock than for 77% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 23, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 47, meaning the company has a riskier financing structure than 53 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a 360° View of 77, Vermilion Energy is better than 77% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 97) and positive market sentiment in the professional investor community (Sentiment Rank of 77), but growth expectations are below-average (Growth Rank of 23) and the financing structure is on the risky side(Safety Rank of 47). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (high sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Vermilion Energy is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Vermilion Energy very positive
ANALYSIS: With an Obermatt Sentiment Rank of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Vermilion Energy is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Vermilion Energy. Analyst Opinions are at a rank of 37 (worse than 63% 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 85, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Vermilion Energy. Even better, the Professional Investors rank is 57, meaning that professional investors hold more stock in this company than in 57% 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 an Obermatt Sentiment Rank of 77 (more positive than 77% compared with investment alternatives), Vermilion Energy has a reputation among professional investors that is significantly higher than 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: Vermilion Energy Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2023, Vermilion Energy shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Vermilion Energy. Price-to-Sales has a value of 80 which means that the stock price compared with what market professionals expect for future sales is lower than for 80% of comparable companies, indicating a good value for Vermilion Energy's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 93% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 89. Compared with other companies in the same industry, dividend yields of Vermilion Energy are expected to be higher than for 53% of all competitors (a Dividend Yield rank of 53). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a strong buy recommendation based on Vermilion Energy's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Vermilion Energy based on its detailed value metrics.
Growth Strategy: Vermilion Energy Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% compared with alternatives), Vermilion Energy shows one of the most restricted growth dynamics in its industry. There is little 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 Vermilion Energy. Sales Growth has a rank of 60, which means that, currently, professionals expect the company to grow more than 60% of its competitors. Profit Growth with a rank of 68 is also above average. But Capital Growth has only a rank of 22, and Stock Returns with 7 are also below-average. Stock returns for Vermilion Energy have recently been below 93% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 23, is a SELL recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Vermilion Energy. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. ...read more
Safety Strategy: Vermilion Energy Debt Financing Safety below-average
| SAFETY METRICS | May 18, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 23 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 47 |
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ANALYSIS: With an Obermatt Safety Rank of 47 (better than 47% compared with alternatives), the company Vermilion Energy 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 Vermilion Energy 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 Vermilion Energy. Leverage is at a rank of 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% 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 23, 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 77% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 47 (worse than 53% compared with alternatives), Vermilion Energy 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 Vermilion Energy. 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: Vermilion Energy Above-Average Financial Performance
| COMBINED PERFORMANCE | May 18, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 59 |
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ANALYSIS: With an Obermatt Combined Rank of 59 (better than 59% compared with investment alternatives), Vermilion Energy (Oil & Gas Production, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Vermilion Energy are a good value (attractively priced) with a consolidated Obermatt Value Rank of 97 (better than 97% of alternatives) but show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 47), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 59, is a buy recommendation based on Vermilion Energy's financial characteristics. As the company Vermilion Energy's key financial metrics exhibit good value (Obermatt Value Rank of 97) but low growth (Obermatt Growth Rank of 23) and risky financing practices (Obermatt Safety Rank of 47), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 97% of comparable companies, may indicate 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. ...read more
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