August 3, 2023
Top 10 Stock Mercury NZ 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: Mercury NZ – Top 10 Stock in New Zealand Stock Exchange Index NZSX 50
Mercury NZ is listed as a top 10 stock on August 03, 2023 in the market index NZSX 50 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 49 (49% performer), Obermatt assesses an overall hold recommendation for Mercury NZ on August 03, 2023.
Snapshot: Obermatt Ranks
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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 Mercury NZ Hold
360 METRICS | August 3, 2023 | |||||||
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VALUE | ||||||||
VALUE | 17 |
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GROWTH | ||||||||
GROWTH | 89 |
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SAFETY | ||||||||
SAFETY | 46 |
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SENTIMENT | ||||||||
SENTIMENT | 49 |
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360° VIEW | ||||||||
360° VIEW | 49 |
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ANALYSIS: With an Obermatt 360° View of 49 (better than 49% compared with alternatives), overall professional sentiment and financial characteristics for the stock Mercury NZ are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Mercury NZ. The consolidated Growth Rank has a good rank of 89, 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. It ranks higher than 89% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 17 means that the share price of Mercury NZ is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 83% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 46, which means that the company has a riskier financing structure than 54% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 49, indicating professional investors are more pessimistic about the stock than for 51% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 49, Mercury NZ is worse than 51% of all alternative stock investment opportunities based on the Obermatt Method. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 89), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 49), the company is rather risky when it comes to financing (Safety Rank of 46). The negative market view on Mercury NZ 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 join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Mercury NZ compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one 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 (even though it is lower than 50). As market sentiment is critical, 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 Mercury NZ only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 49 (better than 49% compared with alternatives), overall professional sentiment and engagement for the stock Mercury NZ is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Mercury NZ. Analyst Opinions are at a rank of 31 (worse than 69% 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 79, 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 Mercury NZ. More encouragingly, the Professional Investors rank is 51, which means that professional investors hold more stock in this company than in 51% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 47, 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 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 49 (less encouraging than 51% compared with investment alternatives), Mercury NZ has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Mercury NZ. 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: Mercury NZ Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 17 (worse than 83% compared with alternatives), Mercury NZ shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Mercury NZ. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 55% 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 24 which means that the stock price compared with what market professionals expect for future profits is higher than 76% of comparable companies, indicating a low value concerning Mercury NZ's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 10 which means that the stock price compared with what market professionals expect for future profit levels is higher than 90% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 36 is also low. Compared with invested capital, the stock price is higher than for 64% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 17, is a sell recommendation based on Mercury NZ's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Mercury NZ? 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 Mercury NZ only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Mercury NZ Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 89 (better than 89% compared with alternatives) for 2023, Mercury NZ 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 Mercury NZ. Sales Growth has a value of 70 which means that currently professionals expect the company to grow more than 70% of its competitors. Profit Growth with a value of 82 and Capital Growth with a rank of 92 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 89, is a buy recommendation for growth and momentum investors. Mercury NZ 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 Mercury NZ, 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: Mercury NZ Debt Financing Safety below-average
SAFETY METRICS | August 3, 2023 | |||||||
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LEVERAGE | ||||||||
LEVERAGE | 62 |
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REFINANCING | ||||||||
REFINANCING | 29 |
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LIQUIDITY | ||||||||
LIQUIDITY | 45 |
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CONSOLIDATED RANK: SAFETY | ||||||||
CONSOLIDATED RANK: SAFETY | 46 |
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ANALYSIS: With an Obermatt Safety Rank of 46 (better than 46% compared with alternatives), the company Mercury NZ has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Mercury NZ 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 Mercury NZ and the other two below average. Leverage is at a rank of 62 meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors.Refinancing is at a rank of 29, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 71% of its competitors. Liquidity is at a rank of 45, meaning that the company generates less profit to service its debt than 55% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 46 (worse than 54% compared with alternatives), Mercury NZ has a financing structure that is riskier 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 Mercury NZ are on the safer side. ...read more
Combined financial peformance: Mercury NZ Below-Average Financial Performance
COMBINED PERFORMANCE | August 3, 2023 | |||||||
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VALUE | ||||||||
VALUE | 17 |
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GROWTH | ||||||||
GROWTH | 89 |
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SAFETY | ||||||||
SAFETY | 45 |
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COMBINED | ||||||||
COMBINED | 46 |
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ANALYSIS: With an Obermatt Combined Rank of 46 (worse than 54% compared with investment alternatives), Mercury NZ (Electric Utilities, New Zealand) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Mercury NZ are low in value (priced high) with a consolidated Value Rank of 17 (worse than 83% of alternatives), and are riskily financed (Safety Rank of 46, which means above-average debt burdens) but show above-average growth (Growth Rank of 89). ...read more
RECOMMENDATION: A Combined Rank of 46, is a hold recommendation based on Mercury NZ's financial characteristics. As the company Mercury NZ shows low value with an Obermatt Value Rank of 17 (83% 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 89% of comparable companies (Obermatt Growth Rank is 89). 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 46 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 Mercury NZ, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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