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Scales Corporation Limited (NZSE:SCL) 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 SCL, it is a company with great financial health as well as a an impressive history of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Scales here.
Flawless balance sheet with proven track record
In the previous year, SCL has ramped up its bottom line by 27%, with its latest earnings level surpassing its average level over the last five years. Not only did SCL outperformed its past performance, its growth also exceeded the Food industry expansion, which generated a 5.9% earnings growth. This is an notable feat for the company. SCL’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 SCL has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. SCL seems to have put its debt to good use, generating operating cash levels of 0.42x 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 relevant factors you should further research:
- 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. On rare occasion, data errors may occur. Thank you for reading.