Why I Like Tomra Systems ASA (OB:TOM)

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Tomra Systems ASA (OB:TOM) 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 TOM, it is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Tomra Systems here.

Flawless balance sheet with solid track record

Over the past year, TOM has grown its earnings by 21%, with its most recent figure exceeding its annual average over the past five years. Not only did TOM outperformed its past performance, its growth also exceeded the Commercial Services industry expansion, which generated a 11% earnings growth. This is an optimistic signal for the future. TOM is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that TOM manages its cash and cost levels well, which is an important determinant of the company’s health. TOM's has produced operating cash levels of 0.67x total debt over the past year, which implies that TOM's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

Next Steps:

For Tomra Systems, there are three fundamental factors you should look at:

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