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Brief Commentary On Pires Investments plc's (LON:PIRI) Fundamentals

Simply Wall St

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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Pires Investments plc (LON:PIRI) due to its excellent fundamentals in more than one area. PIRI is a company with great financial health as well as a an impressive track record of performance. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Pires Investments here.

Flawless balance sheet with solid track record

PIRI delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 36% return to shareholders, which is an optimistic signal for the future. PIRI'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 PIRI has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. Investors should not worry about PIRI’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

AIM:PIRI Income Statement, July 19th 2019

Next Steps:

For Pires Investments, I've put together three key aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for PIRI’s future growth? Take a look at our free research report of analyst consensus for PIRI’s outlook.
  2. Valuation: What is PIRI 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 PIRI is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PIRI? 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.