Why Norbit ASA (OB:NORBIT) Could Have A Place In Your Portfolio

I’ve been keeping an eye on Norbit ASA (OB:NORBIT) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe NORBIT has a lot to offer. Basically, it is a financially-sound company with a great history of performance, trading at a discount. 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 Norbit here.

Undervalued with proven track record

NORBIT delivered a satisfying double-digit returns of 10% in the most recent year Not surprisingly, NORBIT outperformed its industry which returned 6.3%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward. NORBIT’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that NORBIT has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. With a debt-to-equity ratio of 4.8%, NORBIT’s debt level is relatively low. Investors’ risk associated with debt is very low and the company has plenty of headroom to grow debt in the future, should the need arise.

OB:NORBIT Income Statement, September 19th 2019
OB:NORBIT Income Statement, September 19th 2019

NORBIT’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. 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. Compared to the rest of the tech industry, NORBIT is also trading below its peers, relative to earnings generated. This bolsters the proposition that NORBIT’s price is currently discounted.

OB:NORBIT Intrinsic value, September 19th 2019
OB:NORBIT Intrinsic value, September 19th 2019

Next Steps:

For Norbit, I’ve compiled three key aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for NORBIT’s future growth? Take a look at our free research report of analyst consensus for NORBIT’s outlook.
  2. Dividend Income vs Capital Gains: Does NORBIT 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 NORBIT as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NORBIT? 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.