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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on accesso Technology Group plc (LON:ACSO) due to its excellent fundamentals in more than one area. ACSO is a financially-sound company with a a buoyant future outlook, not yet reflected in the share price. 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 accesso Technology Group here.
Excellent balance sheet and good value
ACSO is an attractive stock for growth-seeking investors, with an expected earnings growth of 38% in the upcoming year, made up of high-quality, operational cash from its core business, which is expected to increase by 69% next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. ACSO is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of ACSO’s peers, it is also trading at a value below those of similar sizes in asset terms. This bolsters the proposition that ACSO’s price is currently discounted.
ACSO is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that ACSO manages its cash and cost levels well, which is a key determinant of the company’s health. ACSO appears to have made good use of debt, producing operating cash levels of 1.04x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For accesso Technology Group, there are three key aspects you should look at:
- Historical Performance: What has ACSO’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.
- Dividend Income vs Capital Gains: Does ACSO 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 ACSO as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ACSO? 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 firstname.lastname@example.org. 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.