Century Aluminum Company (NASDAQ:CENX) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of CENX, it is a financially-sound company with a a buoyant future outlook, not yet reflected in the share price. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Century Aluminum here.
Very undervalued with reasonable growth potential
CENX is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of CENX’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the metals and mining industry, CENX is also trading below its peers, relative to earnings generated. This further reaffirms that CENX is potentially undervalued.
CENX’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that CENX has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. With a debt-to-equity ratio of 30%, CENX’s debt level is reasonable. This means that CENX’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt.
For Century Aluminum, there are three relevant aspects you should further research:
- Historical Performance: What has CENX’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.
- Dividend Income vs Capital Gains: Does CENX 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 CENX as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CENX? 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 past 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. For errors that warrant correction please contact the editor at email@example.com.