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I've been keeping an eye on RHI Magnesita N.V. (LON:RHIM) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe RHIM has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. 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 RHI Magnesita here.
Good value with adequate balance sheet
RHIM'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 suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. RHIM's has produced operating cash levels of 0.34x total debt over the past year, which implies that RHIM's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. RHIM's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Compared to the rest of the basic materials industry, RHIM is also trading below its peers, relative to earnings generated. This bolsters the proposition that RHIM's price is currently discounted.
Next Steps:
For RHI Magnesita, I've put together three key factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for RHIM’s future growth? Take a look at our free research report of analyst consensus for RHIM’s outlook.
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Historical Performance: What has RHIM'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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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RHIM? 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.