In This Article:
Want to participate in a research study? Help shape the future of investing tools and earn a $60 gift card!
Avensia AB (publ) (STO:AVEN) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of AVEN, it is a financially-sound company with a strong track record and a buoyant growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Avensia here.
Outstanding track record with flawless balance sheet
AVEN is an attractive stock for growth-seeking investors, with an expected earnings growth of 33% in the upcoming year. This growth in the bottom-line is bolstered by an impressive top-line expansion of 61% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. AVEN delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 34%, which is an notable feat for the company.
AVEN’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 AVEN manages its cash and cost levels well, which is a key determinant of the company’s health. Looking at AVEN’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. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
Next Steps:
For Avensia, I’ve put together three important aspects you should further examine:
-
Valuation: What is AVEN 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 AVEN is currently mispriced by the market.
-
Dividend Income vs Capital Gains: Does AVEN 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 AVEN as an investment.
-
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AVEN? 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.