Why Fundamental Investors Love Auto Trader Group plc (LON:AUTO)

Auto Trader Group plc (LSE:AUTO) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of AUTO, it is a company with great financial health as well as a an impressive track record of performance. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Auto Trader Group here.

Proven track record with adequate balance sheet

AUTO has a strong track record of performance. In the previous year, AUTO delivered a significant return, with earnings far outstripping equities by more than double. Not surprisingly, AUTO outperformed its industry which returned 18.45%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward. AUTO’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. AUTO appears to have made good use of debt, producing operating cash levels of 0.55x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

LSE:AUTO Income Statement Jun 13th 18

Next Steps:

For Auto Trader Group, I’ve compiled three fundamental factors you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for AUTO’s future growth? Take a look at our free research report of analyst consensus for AUTO’s outlook.

2. Valuation: What is AUTO 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 AUTO is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of AUTO? 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 pass 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.