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Wacker Neuson SE (FRA:WAC) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of WAC, it is a financially-robust company with a a great track record of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on Wacker Neuson here.
Solid track record and good value
Over the past year, WAC has grown its earnings by 62%, with its most recent figure exceeding its annual average over the past five years. Not only did WAC outperformed its past performance, its growth also surpassed the Machinery industry expansion, which generated a -5.8% earnings growth. This is what investors like to see! WAC 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. With a debt-to-equity ratio of 31%, WAC’s debt level is reasonable. This implies that WAC has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt.
WAC'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 WAC's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, WAC's share price is trading below the group's average. This supports the theory that WAC is potentially underpriced.
For Wacker Neuson, I've compiled three essential aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for WAC’s future growth? Take a look at our free research report of analyst consensus for WAC’s outlook.
- Dividend Income vs Capital Gains: Does WAC 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 WAC as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of WAC? 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 email@example.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.