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I've been keeping an eye on Public Joint-Stock Company Lenenergo (MCX:LSNG) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe LSNG has a lot to offer. Basically, it is a financially-sound company with an impressive history of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, take a look at the report on Lenenergo here.
Undervalued with solid track record
Over the past year, LSNG has grown its earnings by 60%, with its most recent figure exceeding its annual average over the past five years. Not only did LSNG outperformed its past performance, its growth also surpassed the Electric Utilities industry expansion, which generated a -3.0% earnings growth. This is what investors like to see! LSNG’s debt-to-equity ratio stands at 26%, which means its debt level is reasonable. This implies that LSNG 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. LSNG seems to have put its debt to good use, generating operating cash levels of 0.75x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
LSNG's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of LSNG's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the electric utilities industry, LSNG is also trading below its peers, relative to earnings generated. This bolsters the proposition that LSNG's price is currently discounted.
Next Steps:
For Lenenergo, I've put together three fundamental aspects you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for LSNG’s future growth? Take a look at our free research report of analyst consensus for LSNG’s outlook.
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Dividend Income vs Capital Gains: Does LSNG 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 LSNG as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LSNG? 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.