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I’ve been keeping an eye on FRoSTA Aktiengesellschaft (FRA:NLM) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe NLM has a lot to offer. Basically, it is a financially-sound company with a an optimistic future outlook, not yet factored into the price. 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, take a look at the report on FRoSTA here.
Flawless balance sheet and good value
NLM’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 its peers with similar levels of earnings, NLM’s share price is trading below the group’s average. This bolsters the proposition that NLM’s price is currently discounted.
NLM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. NLM appears to have made good use of debt, producing operating cash levels of 1.12x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For FRoSTA, there are three essential aspects you should look at:
- Historical Performance: What has NLM’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.
- Dividend Income vs Capital Gains: Does NLM 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 NLM as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NLM? 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.