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Why Fundamental Investors Might Love Resonance Health Limited (ASX:RHT)

Simply Wall St

I've been keeping an eye on Resonance Health Limited (ASX:RHT) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RHT has a lot to offer. Basically, it is a company with great financial health as well as a a great track record of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Resonance Health here.

Flawless balance sheet with outstanding track record

Over the past few years, RHT has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. This illustrates a strong track record, leading to a satisfying return on equity of 22%, which is what investors like to see! RHT'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 RHT manages its cash and cost levels well, which is an important determinant of the company’s health. RHT currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.

ASX:RHT Income Statement, August 30th 2019

Next Steps:

For Resonance Health, there are three fundamental factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for RHT’s future growth? Take a look at our free research report of analyst consensus for RHT’s outlook.
  2. Valuation: What is RHT 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 RHT is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RHT? 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.