Why Profire Energy, Inc. (NASDAQ:PFIE) Could Have A Place In Your Portfolio
Profire Energy, Inc. (NASDAQ:PFIE) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of PFIE, it is a financially-healthy company with a excellent growth outlook, not yet priced into the stock. Below is a brief commentary on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on Profire Energy here.
Flawless balance sheet and undervalued
PFIE's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of PFIE's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the energy services industry, PFIE is also trading below its peers, relative to earnings generated. This further reaffirms that PFIE is potentially undervalued.
PFIE'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 implies that PFIE manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at PFIE's capital structure, the company has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
Next Steps:
For Profire Energy, I've put together three pertinent aspects you should further research:
Historical Performance: What has PFIE's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Dividend Income vs Capital Gains: Does PFIE 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 PFIE as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of PFIE? 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.
