September 12, 2024
Top 10 Stock Mondi PLC 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: Mondi PLC – Top 10 Stock in FTSE 100 Index
Mondi PLC is listed as a top 10 stock on September 12, 2024 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the 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 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Mondi PLC on September 12, 2024.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Paper Products |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Low Emissions, Energy Efficient, Diversity Europe, Human Rights, Renewables Users |
| Size class | X-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 Mondi PLC Strong Buy
| 360 METRICS | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| SENTIMENT | ||||||||
| SENTIMENT | 91 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Mondi PLC are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Mondi PLC. The consolidated Sentiment Rank has a good rank of 91, which means that professional investors are more optimistic about the stock than for 91% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 66 or better than 66% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 36, meaning that the share price of Mondi PLC is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 43. ...read more
RECOMMENDATION: With a consolidated 360° View of 78, Mondi PLC is better positioned than 78% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 91) and safe financing practices (Safety Rank of 66), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Mondi PLC̣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Mondi PLC very positive
ANALYSIS: With an Obermatt Sentiment Rank of 91 (better than 91% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Mondi PLC is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Mondi PLC. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 69, which means that currently, professional investors hold more stock in this company than in 69% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 68 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 68% of competitors). But Analyst Opinions Change has a below-average rank of 42, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Mondi PLC. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 91 (more positive than 91% compared with investment alternatives), Mondi PLC has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Mondi PLC Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 36 (worse than 64% compared with alternatives), Mondi PLC 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 Mondi PLC. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 65% 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 34 which means that the stock price compared with what market professionals expect for future profits is higher than 66% of comparable companies, indicating a low value concerning Mondi PLC's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 36 which means that the stock price compared with what market professionals expect for future profit levels is higher than 64% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 38 is also low. Compared with invested capital, the stock price is higher than for 62% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 36, is a hold recommendation based on Mondi PLC's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Mondi PLC? 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 Mondi PLC only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Mondi PLC Growth Momentum low
| GROWTH METRICS | September 12, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 81 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 20 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 4 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 75 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 43 |
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ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Mondi PLC shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Mondi PLC. Sales Growth has a rank of 81 which means that currently professionals expect the company to grow more than 81% of its competitors. Stock Returns are also above average with a rank of 75. But Capital Growth has only a rank of 4, which means that currently professionals expect the company to grow its invested capital less than 96% of its competitors. Profit Growth is also low, with a rank of only 20, which means that, currently, professionals expect the company to grow its profits below average. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 75% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more
Safety Strategy: Mondi PLC Debt Financing Safety above-average
| SAFETY METRICS | September 12, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 62 |
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| REFINANCING | ||||||||
| REFINANCING | 47 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 66 |
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ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Mondi PLC 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 Mondi PLC 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 Mondi PLC. 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. Liquidity is also good at a rank of 55, meaning the company generates more profit to service its debt than 55% 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 47, 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 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 66 (better than 66% compared with alternatives), Mondi PLC has a financing structure that is 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 Mondi PLC. 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: Mondi PLC Above-Average Financial Performance
| COMBINED PERFORMANCE | September 12, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 36 |
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| GROWTH | ||||||||
| GROWTH | 43 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 54 |
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ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Mondi PLC (Paper Products, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Mondi PLC are low in value (priced high) with a consolidated Value Rank of 36 (worse than 64% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 66), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Mondi PLC's financial characteristics. As the company Mondi PLC's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 36) and low growth (Obermatt Growth Rank of 43), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 66) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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