SNAM shares: Price analysis before buying or selling

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Yes

ISIN code: IT0003153415

Ticker: BIT: SRG

Index or market: FTSE MIB

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Elements to consider before selling or buying SNAM shares

Analysis N°1

Indicators from the commodities market must be followed along with developments in the price of natural gas and oil, as these two energies are often correlated.

Analysis N°2

The SNAM group's international expansion strategy should also attract your attention and we will be watching more specifically for the implementation of strategic partnerships or the purchase or creation of joint ventures abroad.

Analysis N°3

A complete study of this group's competition is also essential in order to assess the possible evolution of SNAM's market share and its development prospects for the coming years.

Analysis N°4

The SNAM Group also often communicates about its strategic plans and annual or longer-term objectives. By comparing these targets with the group's actual results, you will have a better chance of detecting future trends in the market for this stock.

Analysis N°5

It is also necessary to monitor any policy or regulatory changes in the various countries in which SNAM operates that may slow down its activities or make them more complex to implement. This includes increasingly stringent environmental measures in Europe and the rest of the world.

Analysis before buying or selling SNAM shares

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General presentation of SNAM

The Italian group SNAM is the country's leading natural gas supplier. Its main activity is the transportation of natural gas with a network of over 32,000 km of pipelines. Of course, SNAM also offers other services such as natural gas storage, natural gas distribution, liquefied gas regasification and related services.

SNAM's share price is currently quoted on the Mercato Telematico Azionario market of the Borsa Italiana. It is also included in the calculation of the FTSE MIB stock market index.

The major competitors of SNAM

SNAM is currently one of the leaders in its sector of activity, but it still faces relatively fierce and important competition from a number of companies likely to take market share. To help you in your analysis, we suggest that you discover here who the main competitors of this group are at present:

IEnova

This group is a privately held Mexican company that specializes in the development, construction and operation of large energy infrastructure projects in Mexico and internationally. The company is also a subsidiary of Sempra Energy Group, an energy services company based in San Diego, California. The IEnova Group currently has no less than 1,000 employees and assets of more than $8.8 billion.

Italgas SpA

Of course, another major competitor of the SNAM group is the Italian company Italgas, which also specialises in the distribution of natural gas, mainly in Italy. This group is one of the most powerful in the country and is listed on the Milan Stock Exchange and is part of the FTSE MIB index.

AltaGas

Finally, another company whose growth and market share you'll want to watch is a Canadian company. This is AltaGas, which also specializes in the transportation and distribution of natural gas.

The major partners of SNAM

The SNAM group has many enemies on the international scene, but it also benefits from the support of some of its allies. We now present you with three examples of strategic partnerships that the group has recently put in place:

Honda

In 2020, the group notably signed an extension of its partnership with the European branch of this car manufacturer in the metal refining segment with the aim of recycling lithum-ion and metal-nickel batteries at the end of the life of hybrid and electric vehicles throughout the country. The SNAM group is also studying the possibility of using these batteries for a second life in the storage of renewable energy in industrial and domestic applications. New hydrometallurgical processes make it possible to extract and recycle materials that can be used in HS units for the manufacture of new batteries or as colouring pigments and additives for concrete. The most common components, such as copper, metals and plastics, are resold for use in various products.

Sirea

In the same year, the SNAM group created a strategic alliance with Sirea, a company specialising in industrial electronics. The aim of this partnership is to collaborate in the field of energy efficiency.

BMW

Finally, previously, in 2014, the group had also signed a partnership with the car manufacturer BMW with the aim of recycling high voltage industrial batteries from the brand's hybrid and electric vehicles.

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The factors in favour of a rise in the SNAM share price:

Knowing SNAM's strengths will allow you to understand how other investors are likely to behave towards this stock by comparing them to its weaknesses. Here are the main strengths of this group.

First of all, we know that SNAM's talent management is excellent, as is the development of its employees' skills, which enables it to respond effectively to demand and compete.
From a financial point of view, the SNAM group also has relatively high margins, particularly in comparison with its competitors in the natural gas sector. Even though it is facing strong downward pressure on its profitability from prices, the group's profit margins seem to have been maintained at satisfactory levels for several years.
We also appreciate the wide geographical coverage of the activities of this SNAM group, which has a large network enabling it to distribute its products and services effectively but also to manage the challenge of competition, particularly from public services.
The SNAM Group also stands out from its main rivals because of its capacity for innovation. Even though its competitors do their utmost to compete, SNAM invests a lot of money in research and development every year and is thus able to offer the market innovative services and products geared to consumers' needs.
SNAM also owns numerous brands and subsidiaries thanks to its well-managed expansion strategy over time. Thanks to these different entities, it can serve several customer segments in its main sector of activity, but also diversify its offer by touching other areas of activity and thus increase its sources of income.
Finally, we would like to emphasize the wide range of products offered by SNAM, which allows us to provide our customers with comprehensive services and thus satisfy the various customer segments in this sector of activity.

The factors in favour of a drop in the SNAM share price:

While SNAM Group has all the cards in hand to ensure its future growth, you shouldn't think that you should immediately take a bullish position on this stock. Indeed, the group also has its weaknesses that you should take into consideration during your analysis and before implementing your strategies.

Firstly, the group shows a high turnover of employees at the lowest levels which is a major concern as salaries can be increasingly high in order to retain talent within the company.
The development of a new logistics network and supply chain by the SNAM group for a few years now also leads to an increase in costs for the group. Indeed, like all companies in this sector, SNAM must thoroughly review its model, taking into account modern technology. These major changes and developments have of course a price which is currently weighing on the overall profitability of this company.
Another major problem for SNAM concerns its relations with its suppliers. Indeed, in the past, SNAM has implemented solutions that have allowed it to reduce the costs of its supply chain, which has called into question the loyalty of its suppliers.
We are also witnessing a loss of exploitation of the niche markets and local monopolies in which SNAM has created genuine customer networks and which are proving less and less effective.
Finally, the SNAM group is currently experiencing a decline in its market share despite increasing revenues. It will therefore be necessary to analyse the causes of these market losses in order to rectify the situation as quickly as possible by facing its competitors more effectively.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

Which indicators should be used to analyse the SNAM action?

If you want to make relevant analyses of SNAM's share price, there are two types of indicators that you should focus on, namely fundamental indicators and technical indicators. Fundamental indicators concern publications and events that may influence the growth of the group. As for technical indicators, they correspond mainly to trend and volatility indicators on stock market charts.

Can I invest in SNAM shares online?

It is of course possible to trade SNAM's share price online as this company is one of the largest market capitalizations in Italy. Indeed, many trading platforms offer this stock to their traders and therefore allow them to take an upward or downward position on this stock without having to acquire this stock through a securities account or a PEA.

What strategy should I adopt to invest in SNAM shares?

A good trading strategy is first and foremost a strategy that is adapted both to the stock to which it applies, in this case SNAM stock, but also and above all to the type of trader and the objectives he or she is aiming for. It is therefore not possible to answer this question precisely and you must determine for yourself the best strategy to adopt to speculate on this share price.

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Analysis before buying or selling SNAM shares