Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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 Scales Corporation Limited (NZSE:SCL), it is a company with great financial health as well as a a great track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Scales here.
Flawless balance sheet with proven track record
SCL delivered a bottom-line expansion of 19% in the prior year, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, SCL also outperformed its industry, which delivered a growth of 16%. This is what investors like to see! SCL’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that SCL manages its cash and cost levels well, which is an important determinant of the company’s health. SCL seems to have put its debt to good use, generating operating cash levels of 0.5x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
Next Steps:
For Scales, I’ve put together three key factors you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for SCL’s future growth? Take a look at our free research report of analyst consensus for SCL’s outlook.
- Valuation: What is SCL 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 SCL is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SCL? 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.