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Why Northern Star Resources Limited (ASX:NST) Could Have A Place In Your Portfolio

Simply Wall St

Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Northern Star Resources Limited (ASX:NST) due to its excellent fundamentals in more than one area. NST is a company with strong financial health as well as a excellent growth outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the full report on Northern Star Resources here.

Flawless balance sheet with high growth potential

One reason why investors are attracted to NST is its earnings growth potential in the near future of 29% which is expected to flow into an impressive return on equity of 25% over the next couple of years. NST's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that NST manages its cash and cost levels well, which is an important determinant of the company’s health. Investors should not worry about NST’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a AU$6.6b market 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:NST Past and Future Earnings, September 16th 2019

Next Steps:

For Northern Star Resources, I've put together three important factors you should further examine:

  1. Historical Performance: What has NST'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.
  2. Valuation: What is NST 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 NST is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NST? 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.