Fact based stock research
Melrose (LSE:MRO)
GB00BNR5MZ78
How to read the free 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.
Melrose stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Melrose (Industrial Conglomerates, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Melrose are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives). But they show above-average growth (Growth Rank of 78) and are safely financed (Safety Rank of 58, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Melrose's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Melrose exhibits low value (Obermatt Value Rank of 34), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 78). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 58) 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). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | United Kingdom |
| Industry | Industrial Conglomerates |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Electromobility |
| Size class | X-Large |
This stock has achievements: Gold Winner CEO, Top 10 Stock.
28-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.
It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.
Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Melrose
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 85 |
|
86 |
|
56 |
|
34 |
|
| GROWTH | ||||||||
| GROWTH | 37 |
|
5 |
|
75 |
|
78 |
|
| SAFETY | ||||||||
| SAFETY | 5 |
|
65 |
|
74 |
|
58 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
32 |
|
96 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
52 |
|
96 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Melrose (Industrial Conglomerates, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Melrose are low in value (priced high) with a consolidated Value Rank of 34 (worse than 66% of alternatives). But they show above-average growth (Growth Rank of 78) and are safely financed (Safety Rank of 58, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Melrose's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Melrose exhibits low value (Obermatt Value Rank of 34), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 78). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 58) 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). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 85 |
|
86 |
|
56 |
|
34 |
|
| GROWTH | ||||||||
| GROWTH | 37 |
|
5 |
|
75 |
|
78 |
|
| SAFETY | ||||||||
| SAFETY | 5 |
|
65 |
|
74 |
|
58 |
|
| COMBINED | ||||||||
| COMBINED | 29 |
|
71 |
|
89 |
|
82 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 34 (worse than 66% compared with alternatives), Melrose shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Melrose. Price-to-Sales is 23 which means that the stock price compared with what market professionals expect for future profits is higher than 77% of comparable companies, indicating a low value concerning Melrose's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 39, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Melrose. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 38 and Dividend Yield, which is lower than 52% 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 34, is a hold recommendation based on Melrose's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Melrose? 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 Melrose? 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. Melrose 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. 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 essential 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) | 89 |
|
64 |
|
30 |
|
23 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 100 |
|
41 |
|
33 |
|
38 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 98 |
|
92 |
|
57 |
|
39 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 50 |
|
71 |
|
47 |
|
48 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 85 |
|
86 |
|
56 |
|
34 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 78 (better than 78% compared with alternatives) for 2024, Melrose 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 four indicators above average for Melrose. Sales Growth has a value of 54, which means that, currently, professionals expect the company to grow more than 54% of its competitors. The same is valid for Profit Growth with a value of 71 and for Capital Growth with 81. In addition, Stock Returns had an above-average rank value of 54, which means they have been higher than 54% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 78, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Melrose exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. 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. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 20 |
|
10 |
|
61 |
|
54 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 94 |
|
45 |
|
18 |
|
71 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
31 |
|
79 |
|
81 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 36 |
|
35 |
|
99 |
|
54 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 37 |
|
5 |
|
75 |
|
78 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Melrose 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 Melrose 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 just one indicator above average for Melrose and the other two below average. Leverage is at a rank of 87 meaning the company has a below-average debt-to-equity ratio. It has less debt than 87% of its competitors.Refinancing is at a rank of 10, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 90% of its competitors. Liquidity is at a rank of 32, meaning that the company generates less profit to service its debt than 68% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 58 (better than 58% compared with alternatives), Melrose has a financing structure that is safer than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Melrose are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Melrose 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 | 22 |
|
55 |
|
82 |
|
87 |
|
| REFINANCING | ||||||||
| REFINANCING | 8 |
|
66 |
|
16 |
|
10 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 19 |
|
28 |
|
73 |
|
32 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 5 |
|
65 |
|
74 |
|
58 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
77 |
|
79 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
29 |
|
94 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
14 |
|
35 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
61 |
|
78 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
32 |
|
96 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Melrose from November 28, 2024.
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