Why Fundamental Investors Might Love Newgen Software Technologies Limited (NSE:NEWGEN)
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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 Newgen Software Technologies Limited (NSE:NEWGEN), it is a financially-sound company with a strong history and a excellent future outlook. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Newgen Software Technologies here.
Outstanding track record with flawless balance sheet
One reason why investors are attracted to NEWGEN is its earnings growth potential in the near future of 21% which is expected to flow into an impressive return on equity of 24% over the next couple of years. In the previous year, NEWGEN has ramped up its bottom line by 40%, with its latest earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 21%. which paints a buoyant picture for the company.
NEWGEN is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that NEWGEN has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. NEWGEN seems to have put its debt to good use, generating operating cash levels of 0.77x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
Next Steps:
For Newgen Software Technologies, I've compiled three essential factors you should look at:
Valuation: What is NEWGEN 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 NEWGEN is currently mispriced by the market.
Dividend Income vs Capital Gains: Does NEWGEN 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 NEWGEN as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of NEWGEN? 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 editorial-team@simplywallst.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.
