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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Siemens Gamesa Renewable Energy, S.A. (BME:SGRE) due to its excellent fundamentals in more than one area. SGRE is a company with impressive financial health as well as a buoyant growth 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 Siemens Gamesa Renewable Energy here.
Excellent balance sheet with reasonable growth potential
Investors in search for stocks with room to flourish should look no further than SGRE, with its expected earinngs growth of 38%, 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. SGRE'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 SGRE manages its cash and cost levels well, which is an important determinant of the company’s health. SGRE seems to have put its debt to good use, generating operating cash levels of 0.3x 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.
For Siemens Gamesa Renewable Energy, I've put together three fundamental aspects you should further examine:
- Historical Performance: What has SGRE'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.
- Valuation: What is SGRE 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 SGRE is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SGRE? 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 email@example.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.