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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Evolution Petroleum Corporation (NYSEMKT:EPM) due to its excellent fundamentals in more than one area. EPM is a company with great financial health as well as a a great track record of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Evolution Petroleum here.
Flawless balance sheet with proven track record
EPM delivered a satisfying double-digit returns of 21% in the most recent year Not surprisingly, EPM outperformed its industry which returned 11%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward. EPM’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. EPM currently has no debt on its balance sheet. This implies that the company is running its operations purely on off equity funding. which is typically normal for a small-cap company. EPM has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
For Evolution Petroleum, there are three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for EPM’s future growth? Take a look at our free research report of analyst consensus for EPM’s outlook.
- Valuation: What is EPM 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 EPM is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of EPM? 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 email@example.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.