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Why Topps Tiles Plc (LON:TPT) Could Have A Place In Your Portfolio

Simply Wall St

I've been keeping an eye on Topps Tiles Plc (LON:TPT) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe TPT 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. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Topps Tiles here.

Excellent balance sheet and good value

TPT's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that TPT manages its cash and cost levels well, which is a key determinant of the company’s health. TPT appears to have made good use of debt, producing operating cash levels of 0.68x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. TPT is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if TPT's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the market, TPT is also trading below other listed companies on the GB stock exchange, relative to earnings generated. This supports the theory that TPT is potentially underpriced.

LSE:TPT Intrinsic value, July 31st 2019

Next Steps:

For Topps Tiles, I've compiled three pertinent aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for TPT’s future growth? Take a look at our free research report of analyst consensus for TPT’s outlook.
  2. Historical Performance: What has TPT'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 TPT? 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.