Fact based stock research
Labrador Iron (TSX:LIF)

CA5054401073

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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.

Labrador Iron stock research in summary

labradorironore.com

ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), Labrador Iron (Steel, Canada) shares have lower financial characteristics compared with similar stocks. Shares of Labrador Iron are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 96), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 20, is a sell recommendation based on Labrador Iron's financial characteristics. As the company Labrador Iron's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 27) and low growth (Obermatt Growth Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 96) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	27
Growth Rank	31
Safety Rank	96
Combined Rank	20

Country	Canada
Industry	Steel
Index	TSX Composite
Size class	Small

2-May-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Labrador Iron

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	54	38	33	27
GROWTH
GROWTH	50	21	59	31
SAFETY
SAFETY	64	96	96	96
SENTIMENT
SENTIMENT	n/a	67	73	^new
360° VIEW
360° VIEW	n/a	35	55	^new

Most recent update of the stock research: 2-May-2024. Financial reporting date used for calculating ranks: 31-Dec-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Labrador Iron is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	54	38	33	27
GROWTH
GROWTH	50	21	59	31
SAFETY
SAFETY	64	96	96	96
COMBINED
COMBINED	54	20	20	20

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Labrador Iron the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Labrador Iron shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Labrador Iron. Price-to-Profit (also referred to as price-earnings, P/E) is 73 which means that the stock price compared with what market professionals expect for future profits is lower than for 73% of comparable companies, indicating a good value concerning Labrador Iron's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 6, which means that the stock price is lower as regards to invested capital than for 6% of comparable investments. On the other hand, Price-to-Sales is less favorable than 84% of alternatives (only 16% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 36% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Labrador Iron's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	31	26	14	16
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	43	74	67	73
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	6	12	13	6
DIVIDEND YIELD
DIVIDEND YIELD	98	73	66	64
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	54	38	33	27

Last update of Value Rank: 2-May-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Labrador Iron; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Labrador Iron shows a below-average growth dynamic in its industry. There is limited 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 Labrador Iron. Capital Growth has a rank of 55, which means that currently professionals expect the company to grow its invested capital more than 31% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 50 (above 50% of alternative investments). But Sales Growth has only a rank of 8, which means that, currently, professionals expect the company to grow less than 92% of its competitors, and Profit Growth is also low at a rank of 31. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Labrador Iron, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	50	6	56	8
PROFIT GROWTH
PROFIT GROWTH	88	39	36	31
CAPITAL GROWTH
CAPITAL GROWTH	n/a	31	57	55
STOCK RETURNS
STOCK RETURNS	82	67	31	50
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	50	21	59	31

Last update of Growth Rank: 2-May-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Labrador Iron.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 96 (better than 96% compared with alternatives) for 2022, the company Labrador Iron has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Labrador Iron 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, with two out of three indicators above average for Labrador Iron. Leverage is at a rank of 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors. Liquidity is also good at a rank of 73, meaning the company generates more profit to service its debt than 73% 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 34, 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 66% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 96 (better than 96% compared with alternatives), Labrador Iron has a financing structure that is significantly safer 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 Labrador Iron. 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. Investors may have a short-term debt challenge with Labrador Iron and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	86	100	100	100
REFINANCING
REFINANCING	18	23	38	34
LIQUIDITY
LIQUIDITY	73	73	73	73
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	64	96	96	96

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Labrador Iron and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	32	8	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	95	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	31	100	^new
MARKET PULSE
MARKET PULSE	n/a	74	82	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	67	73	^new

Last update of Sentiment Rank: 2-May-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Labrador Iron.
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