Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Graphite India Limited (NSE:GRAPHITE) due to its excellent fundamentals in more than one area. GRAPHITE is a financially-robust company with a an impressive 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 Graphite India here.
Outstanding track record with flawless balance sheet and pays a dividend
Over the past few years, GRAPHITE has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. This strong performance generated a robust double-digit return on equity of 72%, which is an notable feat for the company. GRAPHITE’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. GRAPHITE’s has produced operating cash levels of 2.79x total debt over the past year, which implies that GRAPHITE’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
GRAPHITE is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if GRAPHITE’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, GRAPHITE’s share price is trading below the group’s average. This bolsters the proposition that GRAPHITE’s price is currently discounted.
For Graphite India, I’ve put together three pertinent factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for GRAPHITE’s future growth? Take a look at our free research report of analyst consensus for GRAPHITE’s outlook.
- Dividend Income vs Capital Gains: Does GRAPHITE 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 GRAPHITE as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of GRAPHITE? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.