August 22, 2024
Top 10 Stock Meridian Energy Hold 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: Meridian Energy – Top 10 Stock in SDG 15: Life on Land
Meridian Energy is listed as a top 10 stock on August 22, 2024 in the market index SDG 15 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. While the company shows high growth, the stock price is high yet professional investor sentiment is low, which may be due to overly optimistic investor behavior, reflected in a low stock price value. Based on the Obermatt 360° View of 35 (35% performer), Obermatt assesses an overall hold recommendation for Meridian Energy on August 22, 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 Meridian Energy Hold
| 360 METRICS | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 54 |
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| SENTIMENT | ||||||||
| SENTIMENT | 44 |
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| 360° VIEW | ||||||||
| 360° VIEW | 35 |
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ANALYSIS: With an Obermatt 360° View of 35 (better than 35% compared with alternatives), overall professional sentiment and financial characteristics for the stock Meridian Energy are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Meridian Energy. The consolidated Growth Rank has a good rank of 83, 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 83% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 54 which means that the company has a financing structure that is safer than 54% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the consolidated Value Rank has a less desirable rank of 3 which means that the share price of Meridian Energy is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is higher than for 97% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 44, which means that professional investors are more pessimistic about the stock than for 56% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 35, Meridian Energy is worse than 65% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, the picture is ambiguous. Growth is above-average (Growth Rank of 83), and the company is safely financed (Safety Rank of 54). However, professional market sentiment is low(Sentiment Rank of 44). The negative market view on Meridian Energy may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to board the train, they may drive stock prices above reasonable levels. It is typical for growth companies to have low value ratings, because 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 Meridian Energy compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one hundred minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value if the value rank is above 60. As market sentiment is low, you should be careful with paying more than market-average for this stock and conduct further research into the company’s future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Meridian Energy only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 44 (better than 44% compared with alternatives), overall professional sentiment and engagement for the stock Meridian Energy is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Meridian Energy. Analyst Opinions are at a rank of 23 (worse than 77% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 60 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Meridian Energy. Market Pulse is also positive with a rank of 70, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 70% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 27, which means that professional investors hold less stock in this company than in 73% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 44 (less encouraging than 56% compared with investment alternatives), Meridian Energy has a reputation among professional investors that is below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Meridian Energy Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Meridian Energy 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 Meridian Energy. Price-to-Sales is 14 which means that the stock price compared with what market professionals expect for future profits is higher than 86% of comparable companies, indicating a low value concerning Meridian Energy's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 13, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Meridian Energy. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 12 and Dividend Yield, which is lower than 56% 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 3, is a sell recommendation based on Meridian Energy's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Meridian Energy? 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 Meridian Energy? 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. Meridian Energy 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: Meridian Energy Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 83 (better than 83% compared with alternatives) for 2024, Meridian Energy 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 Meridian Energy. Sales Growth has a rank of 96 which means that currently, professionals expect the company to grow more than 96% of its competitors. Both Profit Growth, with a rank of 81, and Stock Returns, with a rank of 71, are also above average. But Capital Growth only has a rank of 7, which means that, currently, professionals expect the company to grow its invested capital less than 93% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 83, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Meridian Energy Debt Financing Safety above-average
| SAFETY METRICS | August 22, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 81 |
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| REFINANCING | ||||||||
| REFINANCING | 34 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 54 |
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ANALYSIS: With an Obermatt Safety Rank of 54 (better than 54% compared with alternatives), the company Meridian Energy 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 Meridian Energy 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 Meridian Energy and the other two below average. Leverage is at a rank of 81 meaning the company has a below-average debt-to-equity ratio. It has less debt than 81% of its competitors.Refinancing is at a rank of 34, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 66% of its competitors. Liquidity is at a rank of 29, meaning that the company generates less profit to service its debt than 71% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 54 (better than 54% compared with alternatives), Meridian Energy 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 Meridian Energy are on the safer side. ...read more
Combined financial peformance: Meridian Energy Below-Average Financial Performance
| COMBINED PERFORMANCE | August 22, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 83 |
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| SAFETY | ||||||||
| SAFETY | 29 |
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| COMBINED | ||||||||
| COMBINED | 43 |
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ANALYSIS: With an Obermatt Combined Rank of 43 (worse than 57% compared with investment alternatives), Meridian Energy (Renewable Electricity, New Zealand) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Meridian Energy are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives). But they show above-average growth (Growth Rank of 83) and are safely financed (Safety Rank of 54, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 43, is a hold recommendation based on Meridian Energy's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Meridian Energy exhibits low value (Obermatt Value Rank of 3), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 83). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 54) 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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