Why Fundamental Investors Might Love Eckoh plc (LON:ECK)

Eckoh plc (LON:ECK) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of ECK, it is a company with robust financial health as well as a excellent future outlook. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Eckoh here.

Excellent balance sheet with reasonable growth potential

Investors in search for stocks with room to flourish should look no further than ECK, with its expected earinngs growth of 41%, made up of high-quality, operational cash from its core business, which is expected to more than double over the next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. ECK’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that ECK manages its cash and cost levels well, which is an important determinant of the company’s health. ECK seems to have put its debt to good use, generating operating cash levels of 1.1x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

AIM:ECK Future Profit January 21st 19
AIM:ECK Future Profit January 21st 19

Next Steps:

For Eckoh, there are three relevant aspects you should look at:

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