BioDue S.p.A. (BIT:BIO2) Has Attractive Fundamentals
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on BioDue S.p.A. (BIT:BIO2) due to its excellent fundamentals in more than one area. BIO2 is a financially-robust company with a a great track record of performance, trading at a discount. 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 BioDue here.
Solid track record with excellent balance sheet
Over the past few years, BIO2 has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 22% return to shareholders, which is an notable feat for the company. BIO2’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. BIO2’s has produced operating cash levels of 0.34x total debt over the past year, which implies that BIO2’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
BIO2’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if BIO2’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the personal products industry, BIO2 is also trading below its peers, relative to earnings generated. This further reaffirms that BIO2 is potentially undervalued.
Next Steps:
For BioDue, there are three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for BIO2’s future growth? Take a look at our free research report of analyst consensus for BIO2’s outlook.
Dividend Income vs Capital Gains: Does BIO2 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 BIO2 as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BIO2? 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 editorial-team@simplywallst.com.
