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How OFX Group Limited (ASX:OFX) Could Add Value To Your Portfolio

Simply Wall St

OFX Group Limited (ASX:OFX) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of OFX, it is a company with strong financial health as well as an optimistic future outlook. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on OFX Group here.

Flawless balance sheet with reasonable growth potential

OFX is expected to churn out cash in the short term, with its operating cash flow predicted to expand by 59%. This underlies the notable 26% return on equity over the next few years leading up to 2022. OFX is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that OFX manages its cash and cost levels well, which is a key determinant of the company’s health. Investors should not worry about OFX’s debt levels because the company has none! It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.

ASX:OFX Past and Future Earnings, July 28th 2019

Next Steps:

For OFX Group, there are three relevant aspects you should further examine:

  1. Historical Performance: What has OFX'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.
  2. Valuation: What is OFX 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 OFX is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OFX? 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.