As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of PJSC LUKOIL (MCX:LKOH), 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 high-level commentary, read the full report on PJSC LUKOIL here.
Undervalued with excellent balance sheet
LKOH’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. LKOH seems to have put its debt to good use, generating operating cash levels of 1.3x 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. LKOH’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of RU companies with similar levels of earnings, LKOH’s share price is trading below the group’s average. This further reaffirms that LKOH is potentially undervalued.
For PJSC LUKOIL, there are three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for LKOH’s future growth? Take a look at our free research report of analyst consensus for LKOH’s outlook.
- Historical Performance: What has LKOH’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LKOH? 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 pass 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.