August 15, 2024
Top 10 Stock Molina Healthcare 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: Molina Healthcare – Top 10 Stock in Employee Satisfaction Leaders in the United States
Molina Healthcare is listed as a top 10 stock on August 15, 2024 in the market index Employee Focus US 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 80 (top 80% performer), Obermatt assesses an overall strong buy recommendation for Molina Healthcare on August 15, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Managed |
| Index | Employee Focus US, D.J. US Health Care, S&P MIDCAP |
| Size class | XX-Large |
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 Molina Healthcare Strong Buy
| 360 METRICS | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 44 |
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| GROWTH | ||||||||
| GROWTH | 86 |
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| SAFETY | ||||||||
| SAFETY | 97 |
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| SENTIMENT | ||||||||
| SENTIMENT | 18 |
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| 360° VIEW | ||||||||
| 360° VIEW | 80 |
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ANALYSIS: With an Obermatt 360° View of 80 (better than 80% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Molina Healthcare are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Molina Healthcare. The consolidated Growth Rank has a good rank of 86, 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 86% of competitors in the same industry. In addition, the consolidated Safety Rank has a safer rank of 97 which means that the company has a financing structure that is safer than 97% 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 44 which means that the share price of Molina Healthcare 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 56% of alternative stocks in the same industry. The consolidated Sentiment Rank also has a low rank of 18, which means that professional investors are more pessimistic about the stock than for 82% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 80, Molina Healthcare is better positioned than 80% 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 86), and the company is safely financed (Safety Rank of 97). However, professional market sentiment is low(Sentiment Rank of 18). The negative market view on Molina Healthcare 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 Molina Healthcare 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 Molina Healthcare negative
ANALYSIS: With an Obermatt Sentiment Rank of 18 (better than 18% compared with alternatives), overall professional sentiment and engagement for the stock Molina Healthcare is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and half above average for Molina Healthcare. Analyst Opinions are at a rank of 22 (worse than 78% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 39, which means that stock research experts are getting even more pessimistic. In addition, the Professional Investors rank is 29, which means that professional investors hold less stock in this company than in 71% of alternative investment opportunities. Pros tend to invest in other companies. The only positive sentiment indicator for Molina Healthcare is Market Pulse, with a rank of 53, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 18 (less encouraging than 82% compared with investment alternatives), Molina Healthcare has a reputation among professional investors that is far below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Molina Healthcare Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 44 (worse than 56% compared with alternatives), Molina Healthcare shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Molina Healthcare. Price-to-Sales (P/S) is 68, which means that the stock price compared with what market professionals expect for future sales is lower than for 68% of comparable companies, indicating a good value concerning Molina Healthcare's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 69% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 1 (dividends are expected to be higher than for 1% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 77% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Molina Healthcare to 23. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 44, is a hold recommendation based on Molina Healthcare's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Molina Healthcare Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 86 (better than 86% compared with alternatives) for 2024, Molina Healthcare 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 Molina Healthcare. Sales Growth has a value of 60 which means that currently professionals expect the company to grow more than 60% of its competitors. Profit Growth with a value of 62 and Capital Growth with a rank of 88 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 49, which means that stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 86, is a buy recommendation for growth and momentum investors. Molina Healthcare 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 Molina Healthcare, 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: Molina Healthcare Debt Financing Safety very solid
| SAFETY METRICS | August 15, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 66 |
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| REFINANCING | ||||||||
| REFINANCING | 85 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 91 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 97 |
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ANALYSIS: With an Obermatt Safety Rank of 97 (better than 97% compared with alternatives) for 2024, the company Molina Healthcare has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Molina Healthcare 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, where all three are above average for Molina Healthcare. Leverage is at 66, meaning the company has a below-average debt-to-equity ratio. It has less debt than 66% of its competitors. Refinancing is at a rank of 85, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Finally, Liquidity is also good at a rank of 91, which means that the company generates more profit to service its debt than 91% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 97 (better than 97% compared with alternatives), Molina Healthcare has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Molina Healthcare Top Financial Performance
| COMBINED PERFORMANCE | August 15, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 44 |
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| GROWTH | ||||||||
| GROWTH | 86 |
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| SAFETY | ||||||||
| SAFETY | 91 |
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| COMBINED | ||||||||
| COMBINED | 100 |
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ANALYSIS: With an Obermatt Combined Rank of 100 (better than 100% compared with investment alternatives), Molina Healthcare (Health Care Managed, USA) shares have much better financial characteristics than comparable stocks. Shares of Molina Healthcare are low in value (priced high) with a consolidated Value Rank of 44 (worse than 56% of alternatives). But they show above-average growth (Growth Rank of 86) and are safely financed (Safety Rank of 97, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 100, is a strong buy recommendation based on Molina Healthcare's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Molina Healthcare exhibits low value (Obermatt Value Rank of 44), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 86). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 97) 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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