June 20, 2024
Top 10 Stock MGL 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: MGL – Top 10 Stock in Australian Securities Exchange Index ASX 50
MGL is listed as a top 10 stock on June 20, 2024 in the market index ASX 50 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is growing above average and professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 34 (34% performer), Obermatt assesses an overall hold recommendation for MGL on June 20, 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 MGL Hold
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 21 |
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| SENTIMENT | ||||||||
| SENTIMENT | 54 |
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| 360° VIEW | ||||||||
| 360° VIEW | 34 |
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ANALYSIS: With an Obermatt 360° View of 34 (better than 34% compared with alternatives), overall professional sentiment and financial characteristics for the stock MGL 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 MGL. 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 Sentiment Rank also has a good rank of 54, which means that professional investors are more optimistic about the stock than for 54% of alternative investment opportunities. But the consolidated Value Rank has a less desirable rank of 27, which means that the share price of MGL is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 73% of alternative stocks in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 21, which means that the company has a financing structure that is riskier than those of 79% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 34, MGL is worse than 66% of all alternative stock investment opportunities based on the Obermatt Method. Only half of the consolidated Obermatt Ranks exhibit excellent performance, so one needs to take a close look. Growth is above-average (Growth Rank of 65), and professional market sentiment is positive (Sentiment Rank of 54), but value and safety are below average. The Safety Rank is the least significant of the four consolidated ranks, because it only reflects financing practices. In the case of high growth, aggressive financing is a good thing. So the question is: How to assess below-average value against above-average growth and sentiment? Growth may be the strongest driver of the investment rationale in this case, which is reflected in institutional investors' opinions. 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 do you sacrifice value for growth? You can use the following rule of thumb: If you take 100 minus the growth rank, you arrive at a possibly minimum level for the value 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 growth rank is above 60. Sometimes market sentiment just extrapolates the past, but sometimes it reflects 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 MGL positive
ANALYSIS: With an Obermatt Sentiment Rank of 54 (better than 54% compared with alternatives), overall professional sentiment and engagement for the stock MGL is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for MGL. Analyst Opinions are at a rank of 37 (worse than 63% 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 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in MGL. More encouragingly, the Professional Investors rank is 90, which means that professional investors hold more stock in this company than in 90% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 36, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 64% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 54 (more positive than 54% compared with investment alternatives), MGL has a reputation among professional investors that is above-average compared with that of its competitors. The sentiment signals are mixed for MGL. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: MGL Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), MGL 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 below average for MGL. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 51% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: 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 MGL's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 26 which means that the stock price compared with what market professionals expect for future profit levels is higher than 74% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 32 is also low. Compared with invested capital, the stock price is higher than for 68% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on MGL's stock price compared with the company's operational size and dividend yields. Should dividend investors pick MGL? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose MGL only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: MGL Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), MGL 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 all but one indicator above average for MGL. Sales Growth has a value of 54 which means that currently professionals expect the company to grow more than 54% of its competitors. Profit Growth with a value of 71 and Capital Growth with a rank of 65 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 45, which means that stock returns have recently been below 55% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. MGL has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for MGL, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: MGL Debt Financing Safety risky
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 38 |
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| REFINANCING | ||||||||
| REFINANCING | 56 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 9 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 21 |
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ANALYSIS: With an Obermatt Safety Rank of 21 (better than 21% compared with alternatives), the company MGL has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of MGL is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for MGL and the other two below average. Refinancing is at 56, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 56% of its competitors. But Leverage is high with a rank of 38, meaning the company has an above-average debt-to-equity ratio. It has more debt than 62% of its competitors. Liquidity is also on the riskier side with a rank of 9, meaning the company generates less profit to service its debt than 91% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 21 (worse than 79% compared with alternatives), MGL has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for MGL are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: MGL Lowest Financial Performance
| COMBINED PERFORMANCE | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 27 |
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| GROWTH | ||||||||
| GROWTH | 65 |
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| SAFETY | ||||||||
| SAFETY | 9 |
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| COMBINED | ||||||||
| COMBINED | 16 |
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ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), MGL (Diversified Capital Markets, Australia) shares have lower financial characteristics compared with similar stocks. Shares of MGL are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives), and are riskily financed (Safety Rank of 21, which means above-average debt burdens) but show above-average growth (Growth Rank of 65). ...read more
RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on MGL's financial characteristics. As the company MGL shows low value with an Obermatt Value Rank of 27 (73% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 65% of comparable companies (Obermatt Growth Rank is 65). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 21 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for MGL, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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