I've been keeping an eye on Husky Energy Inc. (TSE:HSE) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe HSE has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. 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 Husky Energy here.
Undervalued with adequate balance sheet
HSE'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 HSE manages its cash and cost levels well, which is an important determinant of the company’s health. HSE appears to have made good use of debt, producing operating cash levels of 0.63x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. HSE is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if HSE'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, HSE's share price is trading below the group's average. This further reaffirms that HSE is potentially undervalued.
For Husky Energy, I've compiled three essential factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for HSE’s future growth? Take a look at our free research report of analyst consensus for HSE’s outlook.
- Historical Performance: What has HSE'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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HSE? 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 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.