December 7, 2023
Top 10 Stock Mercury General 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 General – Top 10 Stock in Dow Jones U.S. Insurance Index
Mercury General is listed as a top 10 stock on December 07, 2023 in the market index D.J. US Insurance because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 32 (32% performer), Obermatt assesses an overall hold recommendation for Mercury General on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | Dividends USA, D.J. US Insurance, S&P MIDCAP |
| 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 Mercury General Hold
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 68 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 98 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Mercury General are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Mercury General. The consolidated Value Rank has an attractive rank of 68, which means that the share price of Mercury General 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 68% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 98. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 38. Professional investors are more confident in 62% other stocks. The consolidated Growth Rank also has a low rank of 37, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 63 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 32, Mercury General is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 68), and the financing structure is on the safer side (Safety Rank of 98). However, sentiment in the professional investor community is below-average (Sentiment Rank of 38), as is the growth momentum for the company (Growth Rank of 37). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Mercury General only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Mercury General 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 General. Analyst Opinions are at a rank of 53 (better than 53% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 94 which means that currently, stock research experts are getting even more optimistic about investments in Mercury General. But Market Pulse has a low rank of 9, 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 91% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 25, which means that, currently, professional investors hold less stock in this company than in 75% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Mercury General has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Mercury General Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 68 (better than 68% compared with alternatives), Mercury General shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Mercury General. Price-to-Sales (P/S) is 91 which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value for Mercury General's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 53. Finally, compared with other companies in the same industry, dividend yields of Mercury General are expected to be higher than for 80% of all competitors (a Dividend Yield rank of 80). The only low rank is for expected profits with a Price-to-Profit Rank of 23, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 68, is a buy recommendation based on Mercury General's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Mercury General Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Mercury General 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 three out of four indicators below-average for Mercury General. While Sales Growth ranks at 85, professionals currently expect the company to grow more than 85% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 29, which means that, currently, professionals expect the company to grow its profits less than 71% of its competitors, and Capital Growth has a low rank of 19. Historic stock returns were also below average with a current Stock Returns rank of 35 which means that the stock returns have recently been below 65% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Mercury General Debt Financing Safety very solid
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 75 |
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| REFINANCING | ||||||||
| REFINANCING | 8 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 16 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 98 |
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ANALYSIS: With an Obermatt Safety Rank of 98 (better than 98% compared with alternatives) for 2022, the company Mercury General has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Mercury General 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 just one indicator above average for Mercury General and the other two below average. Leverage is at a rank of 75 meaning the company has a below-average debt-to-equity ratio. It has less debt than 75% of its competitors.Refinancing is at a rank of 8, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 92% of its competitors. Liquidity is at a rank of 16, meaning that the company generates less profit to service its debt than 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 98 (better than 98% compared with alternatives), Mercury General has a financing structure that is significantly safer 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 General are on the safer side. ...read more
Combined financial peformance: Mercury General Above-Average Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 68 |
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| GROWTH | ||||||||
| GROWTH | 37 |
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| SAFETY | ||||||||
| SAFETY | 16 |
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| COMBINED | ||||||||
| COMBINED | 50 |
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ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Mercury General (Property & Casualty Insurance, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Mercury General are a good value (attractively priced) with a consolidated Value Rank of 68 (better than 68% of alternatives), are safely financed (Safety Rank of 98, which means low debt burdens), but show below-average growth (Growth Rank of 37). ...read more
RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on Mercury General's financial characteristics. As the company Mercury General's key financial metrics exhibit good value (Obermatt Value Rank of 68) but low growth (Obermatt Growth Rank of 37) while being safely financed (Obermatt Safety Rank of 98), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 68% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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