Mineral Commodities Ltd (ASX:MRC): The Best Of Both Worlds
As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Mineral Commodities Ltd (ASX:MRC), it is a financially-robust company with a an impressive track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Mineral Commodities here.
Outstanding track record and undervalued
In the past couple of years, MRC has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 21.63% return to shareholders, which is what investors like to see! MRC’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 MRC manages its cash and cost levels well, which is an important determinant of the company’s health. MRC seems to have put its debt to good use, generating operating cash levels of 5.31x 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.
MRC is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. 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 its peers with similar levels of earnings, MRC’s share price is trading below the group’s average. This supports the theory that MRC is potentially underpriced.
Next Steps:
For Mineral Commodities, I’ve compiled three essential aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for MRC’s future growth? Take a look at our free research report of analyst consensus for MRC’s outlook.
Dividend Income vs Capital Gains: Does MRC 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 MRC as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MRC? 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.
