Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on STMicroelectronics NV. (ENXTPA:STM) due to its excellent fundamentals in more than one area. STM is a company with robust financial health as well as an optimistic future outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on STMicroelectronics here.
Excellent balance sheet with reasonable growth potential
STM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that STM has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. STM seems to have put its debt to good use, generating operating cash levels of 1.25x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For STMicroelectronics, there are three important aspects you should further research:
- Historical Performance: What has STM’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 STM 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 STM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of STM? 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 pass 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.