In This Article:
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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 Ferguson plc (LON:FERG), it is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Ferguson here.
Proven track record with adequate balance sheet
Over the past few years, FERG has demonstrated a proven ability to generate robust returns of 22%. Not surprisingly, FERG outperformed its industry which returned 15%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. FERG 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. FERG seems to have put its debt to good use, generating operating cash levels of 0.35x 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.
Next Steps:
For Ferguson, I've compiled three key aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for FERG’s future growth? Take a look at our free research report of analyst consensus for FERG’s outlook.
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Valuation: What is FERG 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 FERG is currently mispriced by the market.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of FERG? 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.