Stock on Watch: Pampa Energia SA (PAM)

Company Profile:

Pampa Energía S.A., an integrated electricity company engages in the generation, transmission, and distribution of electricity in Argentina. The company operates hydroelectric and thermal generation facilities. It has an installed generating capacity of 2,217 MW. The company operates and maintains high-tension transmission network of 12,365 km of lines of its own in Argentina, as well as 6,158 km of Transba high voltage lines in the Province of Buenos Aires; and distributes electricity to approximately 2.8 million customers. It is also involved in the exploration and exploitation of oil and gas; operation of financial investment, as well as investing in other companies with complementary businesses; and authorization in acting as an agent and clearing member of ROFEX. 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:

Pampa Energía S.A. announced that it will hold a General Ordinary and Extraordinary Shareholders’ Meeting on June 22, 2016, at 11:00 a.m.

On May 13, 2016, the company announced the results for the quarter ended on March 31, 2016. Consolidated sales revenues of AR$4,226.7 million for the quarter ended on March 31, 2016, 151.9% higher than the AR$1,678.0 million for the quarter of 2015.

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 better efficiency. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator. RSI is increasing to 64.77. 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 STRONG BUY.