Why I Like Filta Group Holdings plc (LON:FLTA)

I’ve been keeping an eye on Filta Group Holdings plc (LON:FLTA) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe FLTA has a lot to offer. Basically, it is a financially-healthy company with a strong track record and a excellent future outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, take a look at the report on Filta Group Holdings here.

High growth potential with proven track record

One reason why investors are attracted to FLTA is its notable earnings growth potential in the near future of 34%. The optimistic bottom-line growth is supported by a similarly outstanding revenue growth over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. Over the past year, FLTA has grown its earnings by 69%, with its most recent figure exceeding its annual average over the past five years. Not only did FLTA outperformed its past performance, its growth also exceeded the Commercial Services industry expansion, which generated a 24% earnings growth. This is an optimistic signal for the future.

AIM:FLTA Past and Future Earnings, August 27th 2019
AIM:FLTA Past and Future Earnings, August 27th 2019

FLTA’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that FLTA manages its cash and cost levels well, which is an important determinant of the company’s health. FLTA’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps FLTA expand.

AIM:FLTA Historical Debt, August 27th 2019
AIM:FLTA Historical Debt, August 27th 2019

Next Steps:

For Filta Group Holdings, I’ve put together three fundamental aspects you should further examine:

  1. Valuation: What is FLTA 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 FLTA is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does FLTA 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 FLTA as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FLTA? 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.