October 17, 2024
Top 10 Stock MGIC 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: MGIC – Top 10 Stock in SDG 3: Good Health and Well-being
MGIC is listed as a top 10 stock on October 17, 2024 in the market index SDG 3 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 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for MGIC on October 17, 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 MGIC Strong Buy
| 360 METRICS | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 49 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 78 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 99 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 100 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock MGIC are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for MGIC. The consolidated Growth Rank has a good rank of 65, 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 65% of competitors in the same industry. The consolidated Safety Rank at 78 means that the company has a financing structure that is safer than 78% 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 99, which means that professional investors are more optimistic about the stock than for 99% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 49, meaning that the share price of MGIC is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 51% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, MGIC is better positioned than 100% 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 65), a safe financing structure (Safety Rank of 78), and positive professional market sentiment (Sentiment Rank of 99), 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 MGIC compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (65% better than peers). The value rank could be the reverse reflection of that (35%). 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 MGIC very positive
ANALYSIS: With an Obermatt Sentiment Rank of 99 (better than 99% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock MGIC is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for MGIC. Analyst Opinions are at a rank of 75 (better than 75% 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 85, 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 MGIC. The Professional Investors rank is 76, which means that currently, professional investors hold more stock in this company than in 76% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 66 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 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 99 (more positive than 99% compared with investment alternatives), MGIC 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 MGIC 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: MGIC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), MGIC shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for MGIC. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 76 which means that the stock price compared with what market professionals expect for future profits is lower than for 76% of comparable companies, indicating a good value concerning MGIC's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 65, and for Dividend Yield with a Dividend Yield Rank of 57. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 95% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 5). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on MGIC's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that MGIC has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing MGIC shares. ...read more
Growth Strategy: MGIC Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), MGIC 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 MGIC. Capital Growth has a rank of 65, which means that currently professionals expect the company to grow its invested capital more than 26% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 83 (above 83% of alternative investments). But Sales Growth has only a rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Profit Growth is also low at a rank of 26. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy 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 MGIC, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: MGIC Debt Financing Safety very solid
| SAFETY METRICS | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 87 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 3 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 79 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 78 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company MGIC has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of MGIC 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 MGIC. 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. Liquidity is also good at a rank of 79, meaning the company generates more profit to service its debt than 79% 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 3, 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 97% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), MGIC 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 MGIC. 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: MGIC Top Financial Performance
| COMBINED PERFORMANCE | October 17, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 49 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 65 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 79 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 84 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 84 (better than 84% compared with investment alternatives), MGIC (Thrifts & Mortgage Finance, USA) shares have much better financial characteristics than comparable stocks. Shares of MGIC are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 78, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 84, is a strong buy recommendation based on MGIC's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company MGIC exhibits low value (Obermatt Value Rank of 49), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 78) 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
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.