Stock on Focus: Pampa Energia SA (PAM)

Company Profile:

Pampa Energía S.A., an integrated electricity company, through its subsidiaries, engages in the electricity generation, transmission, and distribution in Argentina. The company operates hydroelectric and thermal generation facilities. It has an installed generating capacity of 2,217 megawatts. The company owns and operates high voltage electricity transmission network of 12,279 kilometers of proprietary lines; and distributes electricity to approximately 2.8 million customers. It is also involved in the production and transportation of natural gas and gas fluids. The company was formerly known as Pampa Holding S.A. and changed its name to Pampa Energía S.A. in September 2008. Pampa Energía S.A. was founded in 1945 and is based in Buenos Aires, Argentina.

Recent News:

The company will hold a General Ordinary and Extraordinary Shareholders’ Meeting on April 29, 2016, at 11:00 a.m on first call, located at Ortiz de Ocampo 3302, Building 4, Ground Floor, City of Buenos Aires.

Consolidated sales revenues of AR$7,160.8 million[1] for the fiscal year ended on December 31, 2015, 15.4% higher than the AR$6,204.6 million for the fiscal year of 2014.

Consolidated sales revenues of AR$1,797.9 million for the quarter ended on December 31, 2015, 8.2% higher than the AR$1,662.0 million for the same period of 2014.

Argentina’s Pampa Energia SA offered Brazilian state-run oil company Petroleo Brasileiro SA about $1.2 billion to buy its 67.2 percent stake in Petrobras Argentina SA, a source with direct knowledge of the bid said on Wednesday.

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

PAM’s strengths can be seen in its strong profitability and robust efficiency compared with its peers. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic oscillator. RSI is in bull territory, which stands at 50.70. The current P/E ratio indicates it is undervalued compared to the average P/E ratio of the industry and the sector. We rate Pampa Energia SA (PAM) a BUY.