Should You Buy Motor Oil (Hellas) Corinth Refineries S.A. (ATH:MOH) When Prices Drop?

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Motor Oil (Hellas) Corinth Refineries S.A. is a financially healthy and robust stock with a proven track record of outperformance. We all know Motor Oil (Hellas) Corinth Refineries, and having this large-cap to cushion your portfolio during a volatile period in the stock market isn’t a bad idea. Today I will give a high-level overview of the stock, and why I believe it’s still attractive.

Check out our latest analysis for Motor Oil (Hellas) Corinth Refineries

Motor Oil (Hellas) Corinth Refineries S.A. Founded in 1970, and led by CEO Vardis Vardinoyannis, the company now has 2.26k employees and with the company’s market capitalisation at €2.5b, we can put it in the mid-cap stocks category. Bear market volatility can have a short-term impact on large, well-established companies, but in the long-run, these businesses are likely to prevail. This is because fundamentally, nothing has changed. A fall in share price is hardly detrimental to its financial health and business operations. So, large-cap stocks are a safe bet to buy more of when the stock market is selling off.

ATSE:MOH Historical Debt, June 18th 2019
ATSE:MOH Historical Debt, June 18th 2019

Motor Oil (Hellas) Corinth Refineries currently has €937m debt on its books which requires regular servicing. This means it needs to have sufficient cash-on-hand to meet upcoming interest expenses. With an interest coverage ratio of 11.72x, Motor Oil (Hellas) Corinth Refineries produces sufficient earnings (EBIT) to cover its interest payments. Anything above 3x is considered safe practice. Moreover, its cash flows from operations copiously covers it debt by 36%, above the safe minimum of 20%. Its cash and short-term investment is also sufficient to cover other upcoming liabilities, which means MOH is financially robust in the face of a volatile market.

ATSE:MOH Income Statement, June 18th 2019
ATSE:MOH Income Statement, June 18th 2019

MOH’s annual earnings growth rate has been positive over the last five years, with an average rate of 41%, overtaking the industry growth rate of 18%. It has also returned an ROE of 26% recently, above the industry return of 12%. This consistent market outperformance illustrates a robust track record of delivering strong returns over a number of years, increasing my conviction in Motor Oil (Hellas) Corinth Refineries as an investment over the long run.

Next Steps:

Motor Oil (Hellas) Corinth Refineries makes for a robust long-term investment based on its scale, financial health and track record. Remember, in bear markets, sell-offs can be unjustified. Ask yourself, has anything really changed with Motor Oil (Hellas) Corinth Refineries? If not, then why not scoop it up at a discount? Lining your portfolio with a few well-established companies can reduce your risk and help you scale your wealth in the long run. One thing you should remember though, is to do your homework. Do your own research, come up with your point of view. Below is a list I’ve put together of other things you should consider before you buy:
  1. Future Outlook: What are well-informed industry analysts predicting for MOH’s future growth? Take a look at our free research report of analyst consensus for MOH’s outlook.
  2. Valuation: What is MOH worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MOH is currently mispriced by the market.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.