How Aurelia Metals Limited (ASX:AMI) Could Add Value To Your Portfolio

Attractive stocks have exceptional fundamentals. In the case of Aurelia Metals Limited (ASX:AMI), there’s is a financially-healthy company with a great history and an optimistic future outlook. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on Aurelia Metals here.

Outstanding track record with flawless balance sheet

In the past couple of years, AMI has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 51%, which paints a buoyant picture for the company.

ASX:AMI Past and Future Earnings, March 16th 2019
ASX:AMI Past and Future Earnings, March 16th 2019

AMI’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 AMI manages its cash and cost levels well, which is a key determinant of the company’s health. AMI appears to have made good use of debt, producing operating cash levels of 1366x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:AMI Historical Debt, March 16th 2019
ASX:AMI Historical Debt, March 16th 2019

Next Steps:

For Aurelia Metals, I’ve put together three essential aspects you should further examine:

  1. Valuation: What is AMI 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 AMI is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does AMI return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from AMI as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AMI? 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.