Yahoo Finance Link Administration Holdings Limited (ASX:LNK) Has Attractive Fundamentals
Link Administration Holdings Limited (ASX:LNK) 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 LNK, it is a financially-healthy company with a an impressive track record of performance, trading at a great value. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Link Administration Holdings here.
Excellent balance sheet and good value
In the previous year, LNK has ramped up its bottom line by 67%, with its latest earnings level surpassing its average level over the last five years. Not only did LNK outperformed its past performance, its growth also surpassed the IT industry expansion, which generated a 22% earnings growth. This paints a buoyant picture for the company. LNK’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. LNK’s has produced operating cash levels of 0.25x total debt over the past year, which implies that LNK’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
LNK’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of LNK’s earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the it industry, LNK is also trading below its peers, relative to earnings generated. This further reaffirms that LNK is potentially undervalued.
Next Steps:
For Link Administration Holdings, there are three key aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for LNK’s future growth? Take a look at our free research report of analyst consensus for LNK’s outlook.
Dividend Income vs Capital Gains: Does LNK 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 LNK as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LNK? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
