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A Holistic Look At Warpaint London PLC (LON:W7L)

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Warpaint London PLC (LON:W7L), there’s is a financially-robust company with a great history and a buoyant growth outlook. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my broad commentary, take a look at the report on Warpaint London here.

Undervalued with excellent balance sheet and pays a dividend

Investors in search for stocks with room to flourish should look no further than W7L, with its expected earnings growth of 26%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 54% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. Over the past year, W7L has grown its earnings by 31%, with its most recent figure exceeding its annual average over the past five years. Not only did W7L outperformed its past performance, its growth also surpassed the Personal Products industry expansion, which generated a 31% earnings growth. This is an optimistic signal for the future.

AIM:W7L Past and Future Earnings, March 4th 2019

W7L is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. W7L seems to have put its debt to good use, generating operating cash levels of 9.55x 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.

AIM:W7L Historical Debt, March 4th 2019

Next Steps:

For Warpaint London, I’ve put together three key factors you should further examine:

  1. Valuation: What is W7L 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 W7L is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does W7L 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 W7L as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of W7L? 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.