October 26, 2023
Top 10 Stock Covenant Transportation 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: Covenant Transportation – Top 10 Stock in Nasdaq Composite Index
Covenant Transportation is listed as a top 10 stock on October 26, 2023 in the market index NASDAQ because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 100 (top 100% performer), Obermatt assesses an overall strong buy recommendation for Covenant Transportation on October 26, 2023.
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 Covenant Transportation Strong Buy
| 360 METRICS | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 79 |
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| SENTIMENT | ||||||||
| SENTIMENT | 61 |
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| 360° VIEW | ||||||||
| 360° VIEW | 100 |
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ANALYSIS: With an Obermatt 360° View of 100 (better than 100% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Covenant Transportation are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Covenant Transportation. The consolidated Value Rank has an attractive rank of 84, which means that the share price of Covenant Transportation is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 84% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 93, 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. The company is also safely financed with a Safety rank of 79. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 61. ...read more
RECOMMENDATION: With a consolidated 360° View of 100, Covenant Transportation is better positioned than 100% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 84), above-average growth (Growth Rank of 93), safe financing practices (Safety Rank of 79), and a positive market sentiment in the professional investor community (Sentiment Rank of 61), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Covenant Transportation is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Covenant Transportation positive
ANALYSIS: With an Obermatt Sentiment Rank of 61 (better than 61% compared with alternatives), overall professional sentiment and engagement for the stock Covenant Transportation is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Covenant Transportation. Analyst Opinions are at a rank of 52 (better than 52% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 88, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Covenant Transportation. Finally, the Professional Investors rank is 51, which means that currently, professional investors hold more stock in this company than in 51% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 61 (more positive than 61% compared with investment alternatives), Covenant Transportation has a reputation among professional investors that is above-average compared with that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 3, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 97% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Covenant Transportation is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Covenant Transportation Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2023, Covenant Transportation shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Covenant Transportation. Price-to-Sales is 81 which means that the stock price compared with what market professionals expect for future sales is lower than for 81% of comparable companies, indicating a good value for Covenant Transportation's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 76% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 60. Compared with other companies in the same industry, dividend yields of Covenant Transportation are expected to be higher than for 50% of all competitors (a Dividend Yield rank of 50). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a buy recommendation based on Covenant Transportation's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Covenant Transportation based on its detailed value metrics.
Growth Strategy: Covenant Transportation Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 93 (better than 93% compared with alternatives) for 2023, Covenant Transportation 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 Covenant Transportation. Sales Growth has a rank of 59 which means that currently, professionals expect the company to grow more than 59% of its competitors. Capital Growth is also above 42% of competitors with a rank of 89, and Stock Returns with the rank of 91 is also an outperformance. Only Profit Growth is low with a rank of 42 which means that currently, professionals expect the company to grow its profits less than 58% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 93, is a buy recommendation for growth and momentum investors. All three operating growth indicators, namely revenue, profit, and capital growth, are showing improvements. This is a good indication of a company with a positive future. That might, at the same time, be the simple reason why profit growth is low. A growing company needs money and thus can't yet show high profit growth. Look out for signs in corporate communication about extra growth efforts costing time and money. If that is the case, Covenant Transportation is a good growth stock. ...read more
Safety Strategy: Covenant Transportation Debt Financing Safety very solid
| SAFETY METRICS | October 26, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 76 |
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| REFINANCING | ||||||||
| REFINANCING | 60 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 79 |
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ANALYSIS: With an Obermatt Safety Rank of 79 (better than 79% compared with alternatives) for 2023, the company Covenant Transportation has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Covenant Transportation 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 Covenant Transportation. Leverage is at 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Refinancing is at a rank of 60, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 60% of its competitors. Finally, Liquidity is also good at a rank of 80, which means that the company generates more profit to service its debt than 80% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 79 (better than 79% compared with alternatives), Covenant Transportation 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: Covenant Transportation Top Financial Performance
| COMBINED PERFORMANCE | October 26, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 84 |
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| GROWTH | ||||||||
| GROWTH | 93 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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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), Covenant Transportation (Trucking, USA) shares have much better financial characteristics than comparable stocks. Shares of Covenant Transportation are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives), show above-average growth (Growth Rank of 93), and are safely financed (Safety Rank of 79), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 100, is a strong buy recommendation based on Covenant Transportation's financial characteristics. As the company Covenant Transportation's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 84), above-average growth (Obermatt Growth Rank of 93), and indicate that the company is safely financed (Obermatt Safety Rank of 79), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Covenant Transportation. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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