Why Fundamental Investors Might Love Aptitude Software Group plc (LON:APTD)

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Aptitude Software Group plc (LON:APTD) due to its excellent fundamentals in more than one area. APTD is a company with great financial health as well as a a great track record of performance. 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 Aptitude Software Group here.

Flawless balance sheet with solid track record

Over the past year, APTD has grown its earnings by 67%, with its most recent figure exceeding its annual average over the past five years. Not only did APTD outperformed its past performance, its growth also exceeded the Software industry expansion, which generated a 7.0% earnings growth. This is an notable feat for the company. APTD’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that APTD has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. APTD currently has no debt on its balance sheet. 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.

LSE:APTD Income Statement, September 30th 2019
LSE:APTD Income Statement, September 30th 2019

Next Steps:

For Aptitude Software Group, there are three essential factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for APTD’s future growth? Take a look at our free research report of analyst consensus for APTD’s outlook.
  2. Valuation: What is APTD 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 APTD is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of APTD? 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.