January 16, 2025
Top 10 Stock Covenant Transportation 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: Covenant Transportation – Top 10 Stock in Nasdaq Composite Index
Covenant Transportation is listed as a top 10 stock on January 16, 2025 in the market index NASDAQ because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 88 (top 88% performer), Obermatt assesses an overall strong buy recommendation for Covenant Transportation on January 16, 2025.
Snapshot: Obermatt Ranks
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 Covenant Transportation Strong Buy
| 360 METRICS | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 92 |
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| SAFETY | ||||||||
| SAFETY | 82 |
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| SENTIMENT | ||||||||
| SENTIMENT | 8 |
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| 360° VIEW | ||||||||
| 360° VIEW | 88 |
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ANALYSIS: With an Obermatt 360° View of 88 (better than 88% compared with alternatives) for 2025, overall professional sentiment and financial characteristics for the stock Covenant Transportation are very positive. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Covenant Transportation. The consolidated Value Rank has an attractive rank of 86, which means that the share price of Covenant Transportation 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 86% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 92, 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. The company is also safely financed with a Safety Rank of 82. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 8. Professional investors are more confident in 92% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 88, Covenant Transportation is better positioned than 88% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 86), above-average growth (Growth Rank of 92), and safe financing practices (Safety Rank of 82), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 8), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Covenant Transportation is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Covenant Transportation negative
ANALYSIS: With an Obermatt Sentiment Rank of 8 (better than 8% compared with alternatives), overall professional sentiment and engagement for the stock Covenant Transportation is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Covenant Transportation. Analyst Opinions are at a rank of 58 (better than 58% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 9, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Covenant Transportation. The Professional Investors rank is also low at 45, meaning that professional investors hold less stock in this company than in 55% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 1, which means that the current professional news and professional social networks are critical of this company (more negative news than for 99% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 8 (less encouraging than 92% compared with investment alternatives), Covenant Transportation has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Covenant Transportation Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 86 (better than 86% compared with alternatives) for 2025, Covenant Transportation shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Covenant Transportation. Price-to-Sales (P/S) is 77, which means that the stock price compared with what market professionals expect for future sales is lower than for 77% of comparable companies, indicating a good value regarding Covenant Transportation's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 74% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 69. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 46% of all competitors have even lower dividend yields than Covenant Transportation (a Dividend Yield Rank of 46). 54% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 86, is a buy recommendation based on Covenant Transportation's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Covenant Transportation Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 92 (better than 92% compared with alternatives) for 2025, Covenant Transportation shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Covenant Transportation. Sales Growth has a rank of 64 which means that currently, professionals expect the company to grow more than 64% of its competitors. Capital Growth is also above 40% of competitors with a rank of 94, and Stock Returns with the rank of 78 is also an outperformance. Only Profit Growth is low with a rank of 40 which means that currently, professionals expect the company to grow its profits less than 60% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 92, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Covenant Transportation is a good growth stock. ...read more
Safety Strategy: Covenant Transportation Debt Financing Safety very solid
| SAFETY METRICS | January 16, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 75 |
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| REFINANCING | ||||||||
| REFINANCING | 64 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 77 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 82 |
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ANALYSIS: With an Obermatt Safety Rank of 82 (better than 82% compared with alternatives) for 2025, the company Covenant Transportation has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Covenant Transportation is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Covenant Transportation. Leverage is at 75, meaning the company has a below-average debt-to-equity ratio. It has less debt than 75% of its competitors. Refinancing is at a rank of 64, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 64% of its competitors. Finally, Liquidity is also good at a rank of 77, which means that the company generates more profit to service its debt than 77% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 82 (better than 82% compared with alternatives), Covenant Transportation has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Covenant Transportation Top Financial Performance
| COMBINED PERFORMANCE | January 16, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 86 |
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| GROWTH | ||||||||
| GROWTH | 92 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| COMBINED | ||||||||
| COMBINED | 100 |
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ANALYSIS: With an Obermatt Combined Rank of 100 (better than 100% compared with investment alternatives), Covenant Transportation (Trucking, USA) shares have much better financial characteristics than comparable stocks. Shares of Covenant Transportation are a good value (attractively priced) with a consolidated Value Rank of 86 (better than 86% of alternatives), show above-average growth (Growth Rank of 92), and are safely financed (Safety Rank of 82), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 100, is a strong buy recommendation based on Covenant Transportation's financial characteristics. As the company Covenant Transportation's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 86), above-average growth (Obermatt Growth Rank of 92), and indicate that the company is safely financed (Obermatt Safety Rank of 82), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Covenant Transportation. 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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