Why I Like Tatton Asset Management plc (LON:TAM)

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 Tatton Asset Management plc (LON:TAM), it is a company with robust financial health as well as an optimistic growth outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Tatton Asset Management here.

Flawless balance sheet with high growth potential

TAM is an attractive stock for growth-seeking investors, with an expected earnings growth of 27% in the upcoming year which is expected to flow into an impressive return on equity of 41% over the next couple of years. TAM'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 indicates that TAM has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Investors should not worry about TAM’s debt levels because the company has none! 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.

Next Steps:

For Tatton Asset Management, I've put together three fundamental aspects you should further examine:

1. Historical Performance: What has TAM'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.
2. Valuation: What is TAM 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 TAM is currently mispriced by the market.
3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TAM? 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.