Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Restore plc (LON:RST) due to its excellent fundamentals in more than one area. RST is a company with a excellent growth outlook, which has not yet been reflected in the share price. 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 Restore here.
Good value with reasonable growth potential
Investors in search for stocks with room to flourish should look no further than RST, with its expected earinngs growth of 32%, 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. RST’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of RST’s peers, it is also trading at a value below those of similar sizes in asset terms. This bolsters the proposition that RST’s price is currently discounted.
For Restore, I’ve compiled three essential aspects you should further examine:
- Historical Performance: What has RST’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.
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RST? 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 past 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. For errors that warrant correction please contact the editor at email@example.com.