Public Joint-Stock Company Ukrtelecom (FRA:UK1): Commentary On Fundamentals

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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 Public Joint-Stock Company Ukrtelecom (FRA:UK1), 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 broad commentary, read the full report on Ukrtelecom here.

Undervalued with excellent balance sheet

UK1’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that UK1 manages its cash and cost levels well, which is an important determinant of the company’s health. UK1’s has produced operating cash levels of 0.8x total debt over the past year, which implies that UK1’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. UK1’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if UK1’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, UK1’s share price is trading below the group’s average. This bolsters the proposition that UK1’s price is currently discounted.

DB:UK1 Price Estimation Relative to Market, July 3rd 2019
DB:UK1 Price Estimation Relative to Market, July 3rd 2019

Next Steps:

For Ukrtelecom, I’ve compiled three essential factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for UK1’s future growth? Take a look at our free research report of analyst consensus for UK1’s outlook.
  2. Historical Performance: What has UK1’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 UK1? 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.