ORBIS AG (ETR:OBS) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of OBS, it is a financially-sound company with a great track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on ORBIS here.
Excellent balance sheet, good value and pays a dividend
Over the past year, OBS has grown its earnings by 33%, with its most recent figure exceeding its annual average over the past five years. Not only did OBS outperformed its past performance, its growth also exceeded the IT industry expansion, which generated a 24% earnings growth. This is what investors like to see! OBS is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that OBS manages its cash and cost levels well, which is a key determinant of the company’s health. OBS appears to have made good use of debt, producing operating cash levels of 65.44x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
OBS 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 OBS's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, OBS's share price is trading below the group's average. This supports the theory that OBS is potentially underpriced.
For ORBIS, I've compiled three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for OBS’s future growth? Take a look at our free research report of analyst consensus for OBS’s outlook.
- Dividend Income vs Capital Gains: Does OBS 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 OBS as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of OBS? 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 firstname.lastname@example.org. 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.