I've been keeping an eye on rhipe Limited (ASX:RHP) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RHP has a lot to offer. Basically, it is a financially-healthy company with a strong track record and a buoyant growth outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on rhipe here.
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Flawless balance sheet with reasonable growth potential
In the past couple of years, RHP has ramped up its bottom line by over 100%, with its latest earnings level surpassing its average level over the last five years. Not only did RHP outperformed its past performance, its growth also exceeded the IT industry expansion, which generated a 22.27% earnings growth. This is an notable feat for the company.
ASX:RHP Future Profit July 30th 18
RHP'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 crucial insight into the health of the company. Looking at RHP's capital structure, the company 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:RHP Historical Debt July 30th 18
Next Steps:
For rhipe, I've compiled three pertinent factors you should look at:
Valuation: What is RHP 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 RHP is currently mispriced by the market.
Dividend Income vs Capital Gains: Does RHP 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 RHP as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RHP? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
