Attractive stocks have exceptional fundamentals. In the case of Arcontech Group plc (LON:ARC), there's is a company with great financial health as well as a a strong track record of performance. 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 Arcontech Group here.
Outstanding track record with flawless balance sheet
Over the past few years, ARC has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 27% return to shareholders, which is an optimistic signal for the future. ARC'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 ARC manages its cash and cost levels well, which is an important determinant of the company’s health. Looking at ARC's capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, 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.
For Arcontech Group, there are three fundamental aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for ARC’s future growth? Take a look at our free research report of analyst consensus for ARC’s outlook.
- Valuation: What is ARC 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 ARC is currently mispriced by the market.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ARC? 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.