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Why Fundamental Investors Might Love Enghouse Systems Limited (TSE:ENGH)

Simply Wall St

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Attractive stocks have exceptional fundamentals. In the case of Enghouse Systems Limited (TSE:ENGH), there's 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, take a look at the report on Enghouse Systems here.

Solid track record with excellent balance sheet

ENGH delivered a bottom-line expansion of 43% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did ENGH outperformed its past performance, its growth also surpassed the Software industry expansion, which generated a 16% earnings growth. This is an notable feat for the company. ENGH'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 ENGH has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. ENGH seems to have put its debt to good use, generating operating cash levels of 131x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

TSX:ENGH Income Statement, May 6th 2019

Next Steps:

For Enghouse Systems, I've compiled three pertinent aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for ENGH’s future growth? Take a look at our free research report of analyst consensus for ENGH’s outlook.
  2. Valuation: What is ENGH 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 ENGH is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ENGH? 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.