Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Oshkosh Corporation (NYSE:OSK) due to its excellent fundamentals in more than one area. OSK is a financially-sound company with a a great track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Oshkosh here.
Flawless balance sheet with solid track record and pays a dividend
OSK delivered a bottom-line expansion of 65% 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, OSK also outperformed its industry, which delivered a growth of 27%. This is an optimistic signal for the future. OSK is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that OSK manages its cash and cost levels well, which is a crucial insight into the health of the company. OSK’s has produced operating cash levels of 0.53x total debt over the past year, which implies that OSK’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
OSK’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. Also, relative to the rest of its peers with similar levels of earnings, OSK’s share price is trading below the group’s average. This further reaffirms that OSK is potentially undervalued.
For Oshkosh, I’ve put together three fundamental aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for OSK’s future growth? Take a look at our free research report of analyst consensus for OSK’s outlook.
- Dividend Income vs Capital Gains: Does OSK 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 OSK as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OSK? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.