In This Article:
Flow Traders N.V. (AMS:FLOW) 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 FLOW, it is a financially-robust company with a excellent future outlook, not yet factored into the price. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Flow Traders here.
Undervalued with high growth potential
One reason why investors are attracted to FLOW is its earnings growth potential in the near future of 27% underlying the notable 29% return on equity over the next few years leading up to 2022. FLOW's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if FLOW'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, FLOW's share price is trading below the group's average. This bolsters the proposition that FLOW's price is currently discounted.
FLOW 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 crucial insight into the health of the company. FLOW’s debt-to-equity ratio stands at -0.6%, which means its debt level is rather small. Investors’ risk associated with debt is very low and the company has plenty of headroom to grow debt in the future, should the need arise.
Next Steps:
For Flow Traders, I've put together three fundamental aspects you should further research:
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Historical Performance: What has FLOW'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.
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Dividend Income vs Capital Gains: Does FLOW 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 FLOW as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FLOW? 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.