Yahoo Finance These Fundamentals Make Kid ASA (OB:KID) Truly Worth Looking At
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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 Kid ASA (OB:KID), it is a financially-sound company with a a strong history of performance, trading at a discount. Below is a brief commentary 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 Kid here.
Solid track record, good value and pays a dividend
KID delivered a bottom-line expansion of 19% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did KID outperformed its past performance, its growth also exceeded the Specialty Retail industry expansion, which generated a -2.0% earnings growth. This is an optimistic signal for the future. KID'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 an important determinant of the company’s health. KID appears to have made good use of debt, producing operating cash levels of 0.26x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
KID is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of KID's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the specialty retail industry, KID is also trading below its peers, relative to earnings generated. This supports the theory that KID is potentially underpriced.
Next Steps:
For Kid, I've compiled three essential aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for KID’s future growth? Take a look at our free research report of analyst consensus for KID’s outlook.
Dividend Income vs Capital Gains: Does KID 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 KID as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of KID? 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.
