Alumina Limited (ASX:AWC): Commentary On Fundamentals
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Alumina Limited (ASX:AWC) due to its excellent fundamentals in more than one area. AWC is a company with great financial health as well as a a strong history of performance. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on Alumina here.
Excellent balance sheet with solid track record
In the past couple of years, AWC has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 24%, which is an notable feat for the company. AWC’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that AWC has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. AWC appears to have made good use of debt, producing operating cash levels of 4.15x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For Alumina, there are three essential aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for AWC’s future growth? Take a look at our free research report of analyst consensus for AWC’s outlook.
Valuation: What is AWC 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 AWC is currently mispriced by the market.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AWC? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.