March 14, 2024
Top 10 Stock Mainfreight 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: Mainfreight – Top 10 Stock in New Zealand Stock Exchange Index NZSX 50
Mainfreight is listed as a top 10 stock on March 14, 2024 in the market index NZSX 50 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 59 (high 59% performer), Obermatt assesses an overall buy recommendation for Mainfreight on March 14, 2024.
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 Mainfreight Buy
| 360 METRICS | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 62 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| SENTIMENT | ||||||||
| SENTIMENT | 77 |
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| 360° VIEW | ||||||||
| 360° VIEW | 59 |
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ANALYSIS: With an Obermatt 360° View of 59 (better than 59% compared with alternatives), overall professional sentiment and financial characteristics for the stock Mainfreight are above average. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Mainfreight. The consolidated Growth Rank has a good rank of 62, 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. This means that growth is higher than for 62% of competitors in the same industry. The consolidated Safety Rank at 72 means that the company has a financing structure that is safer than 72% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 77, which means that professional investors are more optimistic about the stock than for 77% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 8, meaning that the share price of Mainfreight is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 92% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 59, Mainfreight is better positioned than 59% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 62), a safe financing structure (Safety Rank of 72), and positive professional market sentiment (Sentiment Rank of 77), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Mainfreight compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (62% better than peers). The value rank could be the reverse reflection of that (38%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Mainfreight very positive
ANALYSIS: With an Obermatt Sentiment Rank of 77 (better than 77% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Mainfreight is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Mainfreight. Analyst Opinions are at a rank of 64 (better than 64% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 50, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Mainfreight. The Professional Investors rank is 57, which means that currently, professional investors hold more stock in this company than in 57% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 89 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 89% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 77 (more positive than 77% compared with investment alternatives), Mainfreight has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Mainfreight stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Mainfreight Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 8 (worse than 92% compared with alternatives), Mainfreight shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Mainfreight. Price-to-Sales is 33 which means that the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning Mainfreight's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 5, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Mainfreight. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 19 and Dividend Yield, which is lower than 64% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 8, is a sell recommendation based on Mainfreight's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Mainfreight? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Mainfreight? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Mainfreight may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Mainfreight Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 62 (better than 62% compared with alternatives), Mainfreight shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Mainfreight. Sales Growth has a rank of 88 which means that currently, professionals expect the company to grow more than 88% of its competitors. Capital Growth is also above 17% of competitors with a rank of 79. But Profit Growth only has a rank of 17, which means that currently professionals expect the company to grow its profits less than 83% of its competitors. And Stock Returns have also been below average with a rank of only 38. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 62, is a buy recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Mainfreight Debt Financing Safety above-average
| SAFETY METRICS | March 14, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 65 |
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| REFINANCING | ||||||||
| REFINANCING | 42 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 72 |
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ANALYSIS: With an Obermatt Safety Rank of 72 (better than 72% compared with alternatives), the company Mainfreight has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Mainfreight 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 Mainfreight. Leverage is at a rank of 65, meaning the company has a below-average debt-to-equity ratio. It has less debt than 65% of its competitors. Liquidity is also good at a rank of 80, meaning the company generates more profit to service its debt than 80% 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 42, 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 58% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 72 (better than 72% compared with alternatives), Mainfreight has a financing structure that is 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 Mainfreight. 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. ...read more
Combined financial peformance: Mainfreight Below-Average Financial Performance
| COMBINED PERFORMANCE | March 14, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 8 |
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| GROWTH | ||||||||
| GROWTH | 62 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| COMBINED | ||||||||
| COMBINED | 42 |
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ANALYSIS: With an Obermatt Combined Rank of 42 (worse than 58% compared with investment alternatives), Mainfreight (Air Freight & Logistics, New Zealand) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Mainfreight are low in value (priced high) with a consolidated Value Rank of 8 (worse than 92% of alternatives). But they show above-average growth (Growth Rank of 62) and are safely financed (Safety Rank of 72, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 42, is a hold recommendation based on Mainfreight's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Mainfreight exhibits low value (Obermatt Value Rank of 8), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 62). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 72) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
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