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Brief Commentary On Ashley House plc's (LON:ASH) Fundamentals

Simply Wall St

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Ashley House plc (LON:ASH) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of ASH, it is a financially-healthy company with an impressive history of performance, trading at a discount. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the full report on Ashley House here.

Undervalued with proven track record

ASH delivered a satisfying double-digit returns of 46% in the most recent year. Not surprisingly, ASH outperformed its industry which returned 7.5%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. ASH is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that ASH has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. ASH appears to have made good use of debt, producing operating cash levels of 1.27x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

AIM:ASH Income Statement, July 5th 2019

ASH's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if ASH's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the healthcare industry, ASH is also trading below its peers, relative to earnings generated. This supports the theory that ASH is potentially underpriced.

AIM:ASH Price Estimation Relative to Market, July 5th 2019

Next Steps:

For Ashley House, there are three relevant factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ASH’s future growth? Take a look at our free research report of analyst consensus for ASH’s outlook.
  2. Dividend Income vs Capital Gains: Does ASH return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from ASH as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ASH? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

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.