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Why Fundamental Investors Might Love Link Administration Holdings Limited (ASX:LNK)

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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 company with great financial health as well as a an impressive track record of performance. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Link Administration Holdings here.

Solid track record with adequate balance sheet

Over the past few years, LNK has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, LNK also outperformed its industry, which delivered a growth of 51%. This is an notable feat for the company. LNK 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. LNK appears to have made good use of debt, producing operating cash levels of 0.21x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

ASX:LNK Income Statement, May 4th 2019
ASX:LNK Income Statement, May 4th 2019

Next Steps:

For Link Administration Holdings, there are three essential aspects you should further research:

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  1. 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.

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

  3. 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!

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.