Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Monadelphous Group Limited (ASX:MND) due to its excellent fundamentals in more than one area. MND is a company with robust financial health as well as a excellent future outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Monadelphous Group here.
Flawless balance sheet with reasonable growth potential
MND is expected to churn out cash in the short term, with its operating cash flow predicted to expand by 95%. This underlies the notable 21% return on equity over the next few years leading up to 2022. MND’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 MND has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. MND appears to have made good use of debt, producing operating cash levels of 1.7x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Monadelphous Group, I’ve put together three important factors you should further examine:
- Historical Performance: What has MND’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.
- Valuation: What is MND 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 MND is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MND? 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 email@example.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.