Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Fevertree Drinks Plc (LON:FEVR) due to its excellent fundamentals in more than one area. FEVR is a company with great financial health as well as a a strong track record of performance. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, read the full report on Fevertree Drinks here.
Flawless balance sheet with solid track record
Over the past few years, FEVR has demonstrated a proven ability to generate robust returns of 32%. Unsurprisingly, FEVR surpassed the Beverage industry return of 20%, which gives us more confidence of the company's capacity to drive earnings going forward. FEVR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that FEVR 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 FEVR’s debt levels because the company has none! This implies that the company is running its operations purely on off equity funding. which is rather impressive for a UK£2.5b market 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.
For Fevertree Drinks, there are three important factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for FEVR’s future growth? Take a look at our free research report of analyst consensus for FEVR’s outlook.
- Valuation: What is FEVR 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 FEVR is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FEVR? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.