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Does The Data Make AST Groupe (EPA:ASP) An Attractive Investment?

Felix Olson

Attractive stocks have exceptional fundamentals. In the case of AST Groupe (EPA:ASP), there’s is a financially-healthy company with a a great history of performance, trading at a discount. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on AST Groupe here.

Outstanding track record, undervalued and pays a dividend

In the past couple of years, ASP has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 35%, which paints a buoyant picture for the company. ASP’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 implies that ASP manages its cash and cost levels well, which is a crucial insight into the health of the company. ASP’s has produced operating cash levels of 0.48x total debt over the past year, which implies that ASP’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ENXTPA:ASP Income Statement Export January 18th 19

ASP’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if ASP’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, ASP’s share price is trading below the group’s average. This bolsters the proposition that ASP’s price is currently discounted.

ENXTPA:ASP Intrinsic Value Export January 18th 19

Next Steps:

For AST Groupe, there are three important aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for ASP’s future growth? Take a look at our free research report of analyst consensus for ASP’s outlook.
  2. Dividend Income vs Capital Gains: Does ASP 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 ASP as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ASP? 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.