Mercer International Inc. (MERC): Street Finally Waking Up

Dimensional Fund Advisors LP recently announced the acquisition of new stake in Mercer International Inc. (NASDAQ:MERC). The institutional investor has increased its shareholding in the Basic Materials company by 3.87% to 4.89 million shares with purchase of 0.18 million shares. This fresh investment now brings its stake to 7.39% valued currently at $67.43 million. In addition, BlackRock Fund Advisors raised its holdings by 0.23 million to 4.58 million shares. And The Vanguard Group, Inc. has lifted its position by 8.02% or 0.12 million shares – to 1.63 million shares.

With over 0.86 million Mercer International Inc. (MERC) shares trading Tuesday and a closing price of $11.90 on the day, the dollar volume was approximately $10.18 million. The shares have shown a negative half year performance of -13.96% and its price on 01/10/23 lost nearly -3.57%. Currently, there are 66.13M common shares owned by the public and among those 40.38M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 5 analysts who have offered their price forecasts for MERC have a consensus price objective of $16.00. The analysts have set the share’s price value over the next 12 months at a high of $22.00 and a low of $13.00. The average price target is 29.17% above its recent price level and an upside to the estimated low will see the stock gain 8.46% over that period. But an upside of 45.91% will see the stock hit the forecast high price target while median target price for the stock is $13.50.

Insiders at the company have transacted a total of 36 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 22 of these insider trades were purchases, accounting for 169,699 shares. Insider sales of the common stock occurred on 14 occasions, with total insider shares sold totaling 49,807 shares.

The top 3 mutual fund holders in Mercer International Inc. are iShares Core S&P Small Cap ETF, DFA US Small Cap Value Portfolio, and Wasatch Small Cap Value Fund. iShares Core S&P Small Cap ETF owns 3.02 million shares of the company’s stock, all valued at over $41.72 million. The company bought an additional 1148.0 shares recently to bring their total holdings to about 4.57% of the shares outstanding. DFA US Small Cap Value Portfolio bought 94308.0 shares to see its total holdings expand to 1.42 million shares valued at over $19.63 million and representing 2.15% of the shares outstanding. Wasatch Small Cap Value Fund bought 0.91 million shares to bring its total holdings to over 0.91 million shares at a value of $12.55 million. Wasatch Small Cap Value Fund now owns shares totaling to 1.38% of the shares outstanding.

Shares of Mercer International Inc. (NASDAQ: MERC) opened at $12.06, down -$0.28 from a prior closing price of $12.34. However, the script later moved the day high at 12.17, down -3.57%. The company’s stock has a 5-day price change of 2.59% and -13.20% over the past three months. MERC shares are trading 2.23% year to date (YTD), with the 12-month market performance down to -1.57% lower. It has a 12-month low price of $10.83 and touched a high of $17.50 over the same period. MERC has an average intraday trading volume of 436.79K shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -0.13%, -7.92%, and -16.40% respectively.

Institutional ownership of Mercer International Inc. (NASDAQ: MERC) shares accounts for 55.40% of the company’s 66.13M shares outstanding. Mutual fund holders own 31.35%, while other institutional holders and individual stakeholders account for 46.43% and 22.65% respectively.

It has a market capitalization of $765.29M and a beta (3y monthly) value of 1.52. The stock’s trailing 12-month PE ratio is 2.62, while the earnings-per-share (ttm) stands at $4.54. The company has a PEG of 0.46 and a Quick Ratio of 2.20 with the debt-to-equity ratio at 1.87. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.71% over the week and 4.01% over the month.

Analysts forecast that Mercer International Inc. (MERC) will achieve an EPS of $0.76 for the current quarter, $0.7 for the next quarter and $2.09 for 2022. The lowest estimate earnings-per-share for the quarter is $0.57 while analysts give the company a high EPS estimate of $0.98. Comparatively, EPS for the current quarter was $0.11 a year ago. Earnings per share for the fiscal year are expected to increase by 796.20%, and -36.26% over the next financial year. EPS should shrink at an annualized rate of 5.73% over the next five years, compared to 36.90% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 5 brokerage firm advisors rate Mercer International Inc. (MERC) as a “Moderate Buy” at a consensus score of 2.40. Specifically, 1 Wall Street analysts polled rate the stock as a buy, while 3 of the 5 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the MERC, a number of firms have released research notes about the stock. CIBC stated their Neutral rating for the stock in a research note on January 10, 2023, with the firm’s price target at $13. RBC Capital Mkts coverage for the Mercer International Inc. (MERC) stock in a research note released on December 08, 2022 offered a Sector Perform rating with a price target of $14. Credit Suisse was of a view on July 06, 2022 that the stock is Outperform, while RBC Capital Mkts gave the stock Outperform rating on January 31, 2022, issuing a price target of $8- $15. Raymond James on their part issued Outperform rating on January 31, 2022.