Macfarlane Gr PLC

Macfarlane Group packaging designs

Macfarlane Group PLC (MACF.L), through its subsidiaries, designs, manufactures, and distributes protective packaging products and labels to businesses. The company operates through Packaging Distribution and Manufacturing Operations segments. The Packaging Distribution segment distributes packaging materials, and supplies storage and warehousing services in the United Kingdom. The Manufacturing Operations segment designs, manufactures, and assembles timber, corrugated, and foam-based packaging materials in the United Kingdom. This segment also designs, manufactures, and supplies self-adhesive and resealable labels to various fast-moving consumer goods (FMCG) customers in the United Kingdom and rest of Europe, and the United States. The company also distributes and supplies packaging equipment; and recovers waste papers and corrugated boards for recycling. In addition, it serves e-commerce retail, logistics, medical, automotive, aerospace, electronics, high street retail, household essentials, and food and hospitality industries. Macfarlane Group PLC was incorporated in 1899 and is headquartered in Glasgow, the United Kingdom.

VectorVest chart of Macfarlane Group
Click or tap image to enlarge

The chart of MACF.L shows price action in candlestick format over the past year. VectorVest values the stock at 190p while MACF.L closed at 140p on the 10th of November 2021. The share is undervalued by the market according to the VectorVest valuation model.

In the bottom window below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the last year forecast EPS has risen from approximately 8p to 10p.

On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as very good. The share pays a dividend of 2% which is well covered by an earnings yield of double that figure. The dividend safety and dividend growth are rated as excellent on VectorVest. The forecast dividend growth of 19% is particularly noteworthy in this low yield environment.

The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is rated as excellent by VectorVest. MACF.L has a forecast Earnings Growth Rate (GRT) of 20% which VectorVest considers to be excellent.

The overall rating of MACF.L using the VectorVest Master Indicator VST (Value, Safety and Trend) is rated as excellent.

Technically, MACF.L is trending strongly as measured by the proprietary VectorVest Comfort Index. The Comfort Index (CI) is an indicator which reflects a stocks ability to resist severe and or lengthy price declines. The Comfort Index is unique in investment research and a secret weapon. VectorVest rates the CI of MACF.L at 1.53 which is excellent on a scale measured between 0 and 2.

At the end of August 2021, MACF.L charted a gap breakout of the last swing high which can be seen clearly on the above chart. The breakout occurred on high relative volume (not shown) which is a strongly bullish sign. Since the breakout the share has retraced and in chartists language “kissed” or tested the last swing high. This is normal behavior within a strong uptrend and shown by the blue horizontal line on the chart above. This level is a magnet for institutional orders whose mantra is to buy into an uptrend at support. Since the share has tested the last swing high MACF.L has resumed its uptrend.

MACF.L has recently moved to a BUY recommendation, once more, on VectorVest.

In summary, MACF.L has excellent growth and safety of earnings fundamentals. The latter plus the technical position, based on the trend of the share price and traded volume patterns, are very supportive of a move much higher soon. The VectorVest stop loss is a close below 128p.

There will be corporate news in the share soon.

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