Q: I have a nice gain on MRE was thinking about trading it out for ATZ,I realize they are different sectors and market caps, do you recommend this switch for a 1-3 year hold and also what would you rank each company out of 10 …Thanks
5i Research Answer:
If growth is the focus then we would be fine with such a switch. MRE is in a slower growth sector, and is more sensitive to interest rates. ATZ has already stated it expects to grow at 30%+. ATZ does report tonight. There is also a big difference in valuation here (MRE 5X P/E, ATZ 23X). MRE pays a dividend (1.5%), ATZ does not. So we would make sure an investor's goals align here. We would give ATZ an 8 and MRE a 6. Note ATZ has more than doubled since its 2016 IPO but has been weak recently on inventory concerns.