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An Examination Of Cardno Limited (ASX:CDD)

I've been keeping an eye on Cardno Limited (ASX:CDD) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CDD has a lot to offer. Basically, it is a company with strong financial health as well as a buoyant growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Cardno here.

Excellent balance sheet with reasonable growth potential

One reason why investors are attracted to CDD is its earnings growth potential in the near future of 29%, supported by its outstanding capacity to churn out cash from operating activities, which is predicted to more than double over the next year. This indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. CDD'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 suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. CDD’s debt-to-equity ratio stands at 37%, which means its debt level is acceptable. This means that CDD’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt.

ASX:CDD Past and Future Earnings, April 29th 2019
ASX:CDD Past and Future Earnings, April 29th 2019

Next Steps:

For Cardno, I've compiled three key aspects you should further examine:

  1. Historical Performance: What has CDD's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Valuation: What is CDD 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 CDD is currently mispriced by the market.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CDD? 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.

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