Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Oshkosh Corporation (NYSE:OSK) due to its excellent fundamentals in more than one area. OSK is a financially-sound company with a an impressive history of performance, trading at a great value. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Oshkosh here.
Excellent balance sheet and good value
OSK delivered a bottom-line expansion of 86.09% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did OSK outperformed its past performance, its growth also exceeded the Machinery industry expansion, which generated a 24.30% earnings growth. This paints a buoyant picture for the company. OSK’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that OSK manages its cash and cost levels well, which is a crucial insight into the health of the company. With a debt-to-equity ratio of 35.22%, OSK’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future.
OSK’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if OSK’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the machinery industry, OSK is also trading below its peers, relative to earnings generated. This bolsters the proposition that OSK’s price is currently discounted.
For Oshkosh, there are three relevant aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for OSK’s future growth? Take a look at our free research report of analyst consensus for OSK’s outlook.
- Dividend Income vs Capital Gains: Does OSK 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 OSK as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OSK? 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.