NASDAQ:TRMD, an undervalued stock with good fundamentals.

Last update: Feb 2, 2024

TORM PLC-A (NASDAQ:TRMD) was identified as a decent value stock by our stock screener. NASDAQ:TRMD scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Analysis for NASDAQ:TRMD

ChartMill assigns a Valuation Rating to every stock. This score ranges from 0 to 10 and evaluates the different valuation aspects and compares the price to earnings and cash flows, while taking into account profitability and growth. NASDAQ:TRMD scores a 8 out of 10:

A Price/Earnings ratio of 4.32 indicates a rather cheap valuation of TRMD.
Compared to the rest of the industry, the Price/Earnings ratio of TRMD indicates a rather cheap valuation: TRMD is cheaper than 84.19% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of TRMD to the average of the S&P500 Index (26.18), we can say TRMD is valued rather cheaply.
TRMD is valuated cheaply with a Price/Forward Earnings ratio of 5.37.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TRMD indicates a rather cheap valuation: TRMD is cheaper than 87.91% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.43. TRMD is valued rather cheaply when compared to this.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TRMD indicates a somewhat cheap valuation: TRMD is cheaper than 61.86% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TRMD indicates a somewhat cheap valuation: TRMD is cheaper than 77.21% of the companies listed in the same industry.
TRMD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of TRMD may justify a higher PE ratio.

Exploring NASDAQ:TRMD's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:TRMD, the assigned 8 is noteworthy for profitability:

TRMD's Return On Assets of 24.66% is amongst the best of the industry. TRMD outperforms 84.65% of its industry peers.
TRMD's Return On Equity of 44.18% is amongst the best of the industry. TRMD outperforms 84.65% of its industry peers.
TRMD's Return On Invested Capital of 22.72% is amongst the best of the industry. TRMD outperforms 84.65% of its industry peers.
The last Return On Invested Capital (22.72%) for TRMD is above the 3 year average (8.75%), which is a sign of increasing profitability.
TRMD has a better Profit Margin (43.82%) than 83.26% of its industry peers.
TRMD's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 45.84%, TRMD is doing good in the industry, outperforming 79.07% of the companies in the same industry.
TRMD's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 73.18%, TRMD is doing good in the industry, outperforming 77.21% of the companies in the same industry.
In the last couple of years the Gross Margin of TRMD has grown nicely.

Understanding NASDAQ:TRMD's Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:TRMD has received a 8 out of 10:

TRMD has an Altman-Z score of 3.85. This indicates that TRMD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TRMD (3.85) is better than 82.79% of its industry peers.
The Debt to FCF ratio of TRMD is 2.24, which is a good value as it means it would take TRMD, 2.24 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.24, TRMD is in the better half of the industry, outperforming 68.84% of the companies in the same industry.
Although TRMD does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
TRMD has a Current Ratio of 2.33. This indicates that TRMD is financially healthy and has no problem in meeting its short term obligations.
TRMD has a Current ratio of 2.33. This is in the better half of the industry: TRMD outperforms 77.67% of its industry peers.
A Quick Ratio of 2.09 indicates that TRMD has no problem at all paying its short term obligations.
The Quick ratio of TRMD (2.09) is better than 77.67% of its industry peers.

How do we evaluate the Growth for NASDAQ:TRMD?

ChartMill employs its own Growth Rating system for all stocks. This score, ranging from 0 to 10, is derived by evaluating different growth factors, such as EPS and revenue growth, taking into account both past performance and future projections. NASDAQ:TRMD has earned a 5 for growth:

The Earnings Per Share has grown by an impressive 104.29% over the past year.
TRMD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 157.48% yearly.
Looking at the last year, TRMD shows a very strong growth in Revenue. The Revenue has grown by 33.31%.
The Revenue has been growing by 17.05% on average over the past years. This is quite good.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of TRMD

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.