Fact based stock research
Melrose (LSE:MRO)

GB00BNR5MZ78

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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.

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Melrose stock research in summary

melroseplc.net


ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Melrose (Industrial Conglomerates, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Melrose are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives). But they show above-average growth (Growth Rank of 94) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more


RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Melrose's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Melrose exhibits low value (Obermatt Value Rank of 35), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 94). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) 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). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country United Kingdom
Industry Industrial Conglomerates
Index FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Electromobility
Size class X-Large

This stock has achievements: Gold Winner CEO, Top 10 Stock.

21-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Research History: Melrose

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 21-Mar-2024. Financial reporting date used for calculating ranks: 30-Jun-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Melrose is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 92 (better than 92% compared with investment alternatives), Melrose (Industrial Conglomerates, United Kingdom) shares have much better financial characteristics than comparable stocks. Shares of Melrose are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives). But they show above-average growth (Growth Rank of 94) and are safely financed (Safety Rank of 64, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 92, is a strong buy recommendation based on Melrose's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Melrose exhibits low value (Obermatt Value Rank of 35), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 94). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 64) 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). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 21-Mar-2024. Stock analysis on combined financial performance: The higher the rank of Melrose the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Melrose 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 Melrose. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 52% 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 27 which means that the stock price compared with what market professionals expect for future profits is higher than 73% of comparable companies, indicating a low value concerning Melrose's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 34 which means that the stock price compared with what market professionals expect for future profit levels is higher than 66% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 48 is also low. Compared with invested capital, the stock price is higher than for 52% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Melrose's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Melrose? 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 Melrose only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 21-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Melrose; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 94 (better than 94% compared with alternatives) for 2024, Melrose 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 four indicators above average for Melrose. Sales Growth has a value of 76, which means that, currently, professionals expect the company to grow more than 76% of its competitors. The same is valid for Profit Growth with a value of 78 and for Capital Growth with 51. In addition, Stock Returns had an above-average rank value of 98, which means they have been higher than 98% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 94, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Melrose exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 21-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Melrose.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Melrose 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 Melrose 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 Melrose. Leverage is at a rank of 82, meaning the company has a below-average debt-to-equity ratio. It has less debt than 82% of its competitors. Liquidity is also good at a rank of 56, meaning the company generates more profit to service its debt than 56% 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 18, 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 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Melrose 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 Melrose. 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. Investors may have a short-term debt challenge with Melrose and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 21-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Melrose and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 21-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Melrose.
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Stock analysis by the purely fact based Obermatt Method for Melrose from March 21, 2024.

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