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Why Fundamental Investors Might Love Ridley Corporation Limited (ASX:RIC)

Simply Wall St

I've been keeping an eye on Ridley Corporation Limited (ASX:RIC) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RIC has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Ridley here.

Excellent balance sheet and good value

RIC'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 suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. RIC seems to have put its debt to good use, generating operating cash levels of 0.34x 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. RIC's share price is trading below its true value according to its price-to-earnings ratio of 14.9x compared to its industry as well as the wider stock market, which means it is relatively cheaper than its peers.

ASX:RIC Price Estimation Relative to Market, August 12th 2019

Next Steps:

For Ridley, there are three pertinent factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for RIC’s future growth? Take a look at our free research report of analyst consensus for RIC’s outlook.
  2. Historical Performance: What has RIC'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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RIC? 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.