I've been keeping an eye on NFI Group Inc. (TSE:NFI) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe NFI has a lot to offer. Basically, it is a financially-sound company with a a strong track record of performance, trading at a discount. 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 NFI Group here.
Undervalued with proven track record
NFI delivered a satisfying double-digit returns of 20% in the most recent year Unsurprisingly, NFI surpassed the Machinery industry return of 8.4%, which gives us more confidence of the company's capacity to drive earnings going forward. NFI is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that NFI manages its cash and cost levels well, which is an important determinant of the company’s health. NFI seems to have put its debt to good use, generating operating cash levels of 0.26x 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.
NFI's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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, NFI's share price is trading below the group's average. This further reaffirms that NFI is potentially undervalued.
For NFI Group, I've compiled three essential factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for NFI’s future growth? Take a look at our free research report of analyst consensus for NFI’s outlook.
- Dividend Income vs Capital Gains: Does NFI 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 NFI as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NFI? 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 firstname.lastname@example.org. 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.