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 Kværner ASA (OB:KVAER), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, read the full report on Kværner here.
Flawless balance sheet and good value
KVAER is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that KVAER manages its cash and cost levels well, which is a crucial insight into the health of the company. KVAER currently has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, 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. KVAER’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if KVAER’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the energy services industry, KVAER is also trading below its peers, relative to earnings generated. This further reaffirms that KVAER is potentially undervalued.
For Kværner, I’ve put together three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for KVAER’s future growth? Take a look at our free research report of analyst consensus for KVAER’s outlook.
- Historical Performance: What has KVAER’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.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KVAER? 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.