Why We Think Acrow Formwork and Construction Services Limited (ASX:ACF) Could Be Worth Looking At
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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 Acrow Formwork and Construction Services Limited (ASX:ACF), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Acrow Formwork and Construction Services here.
Flawless balance sheet and undervalued
ACF 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 an important determinant of the company’s health. ACF's has produced operating cash levels of 1.31x total debt over the past year, which implies that ACF's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. ACF's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. 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. Also, relative to the rest of its peers with similar levels of earnings, ACF's share price is trading below the group's average. This further reaffirms that ACF is potentially undervalued.
Next Steps:
For Acrow Formwork and Construction Services, I've put together three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for ACF’s future growth? Take a look at our free research report of analyst consensus for ACF’s outlook.
Historical Performance: What has ACF'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.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ACF? 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.
