Yahoo Finance Linamar Corporation (TSE:LNR): Commentary On Fundamentals
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 Linamar Corporation (TSE:LNR), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Linamar here.
Undervalued with adequate balance sheet
LNR’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 implies that LNR manages its cash and cost levels well, which is a crucial insight into the health of the company. LNR appears to have made good use of debt, producing operating cash levels of 0.28x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. LNR’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. 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, LNR’s share price is trading below the group’s average. This supports the theory that LNR is potentially underpriced.
Next Steps:
For Linamar, I’ve put together three fundamental factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for LNR’s future growth? Take a look at our free research report of analyst consensus for LNR’s outlook.
Historical Performance: What has LNR’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 LNR? 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.