Yahoo Finance Why I Like Freedom Insurance Group Limited (ASX:FIG)
As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Freedom Insurance Group Limited (ASX:FIG), it is a company that has been able to sustain great financial health, trading at an attractive share price. 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 Freedom Insurance Group here.
Flawless balance sheet and undervalued
FIG’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 indicates that FIG has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. Looking at FIG’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. FIG has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future. FIG’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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. Also, relative to the rest of its peers with similar levels of earnings, FIG’s share price is trading below the group’s average. This supports the theory that FIG is potentially underpriced.
Next Steps:
For Freedom Insurance Group, I’ve put together three important aspects you should further examine:
Future Outlook: What are well-informed industry analysts predicting for FIG’s future growth? Take a look at our free research report of analyst consensus for FIG’s outlook.
Historical Performance: What has FIG’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.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FIG? 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.
