Is The Citadel Group Limited (ASX:CGL) Potentially Underrated?

I’ve been keeping an eye on The Citadel Group Limited (ASX:CGL) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe CGL has a lot to offer. Basically, it is a company with great financial health as well as a a strong history of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, read the full report on Citadel Group here.

Outstanding track record with excellent balance sheet

CGL delivered a bottom-line expansion of 38% in the prior year, 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 22%, which paints a buoyant picture for the company. CGL 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. CGL’s has produced operating cash levels of 1.08x total debt over the past year, which implies that CGL’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ASX:CGL Income Statement Export October 12th 18

Next Steps:

For Citadel Group, I’ve put together three pertinent factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for CGL’s future growth? Take a look at our free research report of analyst consensus for CGL’s outlook.

2. Valuation: What is CGL 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 CGL is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CGL? 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.