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I've been keeping an eye on Sandfire Resources NL (ASX:SFR) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SFR has a lot to offer. Basically, 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 broad commentary, read the full report on Sandfire Resources here.
Flawless balance sheet and good value
SFR is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that SFR has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. SFR seems to have put its debt to good use, generating operating cash levels of 321x 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. SFR is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if SFR's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, SFR's share price is trading below the group's average. This further reaffirms that SFR is potentially undervalued.
Next Steps:
For Sandfire Resources, I've put together three fundamental factors you should look at:
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Future Outlook: What are well-informed industry analysts predicting for SFR’s future growth? Take a look at our free research report of analyst consensus for SFR’s outlook.
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Historical Performance: What has SFR'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.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SFR? 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.