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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 history of performance. Below is a brief commentary 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. Not only did SCL outperformed its past performance, its growth also surpassed the Food industry expansion, which generated a 16% earnings growth. This paints a buoyant picture 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 suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. SCL's has produced operating cash levels of 0.5x total debt over the past year, which implies that SCL's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Scales, I've put together three essential aspects 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 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.