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I've been keeping an eye on VBG Group AB (publ) (STO:VBG B) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe VBG B has a lot to offer. Basically, it is a financially-sound company with a a strong track record of performance, trading at a great value. 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, take a look at the report on VBG Group here.
Good value with proven track record
VBG B delivered a bottom-line expansion of 37% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did VBG B outperformed its past performance, its growth also surpassed the Machinery industry expansion, which generated a 33% earnings growth. This is what investors like to see! VBG B is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. VBG B's has produced operating cash levels of 0.28x total debt over the past year, which implies that VBG B's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
VBG B is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. 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. Compared to the rest of the machinery industry, VBG B is also trading below its peers, relative to earnings generated. This further reaffirms that VBG B is potentially undervalued.
For VBG Group, there are three relevant aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for VBG B’s future growth? Take a look at our free research report of analyst consensus for VBG B’s outlook.
- Dividend Income vs Capital Gains: Does VBG B 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 VBG B as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of VBG B? 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 firstname.lastname@example.org. 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.