Manifest's  Instablog

During our weekly updates, we bring companies to the attention of investors by focusing on above-average return candidates. In the wake of filing our tax returns, it seems fitting that funeral services and memorial leader Matthews (MATW) was among the companies of interest.

MATW currently has a 3-5 year low annualized total return forecast of 17%. We believe that the low total return forecast from Value Line is a useful, representative and fairly reliable "second opinion" for seeking candidates for consideration.

At Manifest Investing, we focus on three major analysis milestones while establishing a return forecast for any company:

(1) Sales growth forecast

(2) Profitability (projected % net margin)

(3) Projected Average P/E

In the case of MATW, we feel a sales growth forecast of 5-6% could combine with a projected net margin of 8% to deliver a 5-year EPS forecast of $3.77. Using a projected average P/E of 16x, the annualized price appreciation is ~14%. Combining a projected dividend yield of 1.0%, the projected annual return is ~15%.

MATW has a financial strength rating of 87 (A++ = 100) and an excellent quality rating.

The following video (8:42) provides a closer look at the fundamental analysis milestones and checks in on technical analysis highlights that suggest potential support levels in the $28-30 range and a relative strength index (RSI) of 42, suggesting a condition closer to over-sold (RSI<30).

www.youtube.com/watch?v=WgIQaK8FPDo

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.