AngloGold Ashanti PLC (NYSE:AU) Emerges as a Prime GARP Investment Candidate

For investors looking to balance the search for growth with some caution, the Growth at a Reasonable Price (GARP) method provides a sensible middle path. This method tries to find companies that are increasing at a rate above the norm but whose stock prices do not reflect all their future possibilities. One useful way to search for these chances is to use fundamental ratings that assess a stock in a few important categories: growth, valuation, profitability, and financial condition. A stock that receives high marks for growth and keeps good marks in profitability and condition, while also being seen as fairly priced, matches the traditional model of an "affordable growth" possibility. AngloGold Ashanti PLC (NYSE:AU), a leading global gold producer, recently appeared from this kind of search, justifying a more detailed examination of its fundamental position.

A Good Base in Growth and Valuation

The heart of the GARP method depends on locating good growth combined with a reasonable price. AngloGold Ashanti's fundamental report shows notable strong points in these areas, receiving a high Growth rating of 8 and a Valuation rating of 8 that is just as high.

The company's growth story is backed by notable recent results and positive future estimates:

• High Recent EPS Growth: Earnings Per Share rose by more than 517% in the past year, a significant jump pushed by increased gold prices and operational performance.
• Continued Historical Growth: Over a longer time, the company has achieved a good average yearly EPS growth of 16.81%, with revenue increasing at more than 10% each year.
• Rising Revenue Forecasts: Analysts expect revenue growth to average 13.47% each year in the near future, pointing to a rise from the past pattern.

Regarding valuation, the numbers imply the market might not be completely accounting for this growth path, offering a possible opening:

• Good Forward Earnings Multiple: While the standard Price/Earnings (P/E) ratio of 19.52 is somewhat high, the more meaningful Price/Forward Earnings ratio is at a quite low 11.17. This is lower priced than almost 79% of similar companies and is much lower than the wider S&P 500.
• Notable Price-to-Free-Cash-Flow: The company is priced low based on its Price/Free Cash Flow ratio, doing better than over 90% of the metals and mining industry.
• Growth-Adjusted Valuation (PEG): The small PEG ratio, which changes the P/E for anticipated earnings growth, also indicates that the stock's price is not high compared to its growth outlook.

Supporting Elements: Profitability and Financial Condition

For a growth case to be lasting and "affordable," it needs to rest on a base of operational quality and a good balance sheet. This is where the search standards for acceptable profitability and condition become important, as they help remove financially weak companies. AngloGold Ashanti gets an 8 for Profitability and a 7 for Financial Condition, supplying that needed steadiness.

The company's profitability figures are excellent, often placed in the best group of its industry:

• High Returns: It has a Return on Equity of 32.17% and a Return on Invested Capital of 23.07%, doing better than over 96% and 97% of industry peers, in order.
• Growing Margins: Its Operating Margin of 37.97% and Profit Margin of 24.58% are with the best in the field and have shown steady gain in recent years.

Financially, the company seems sound and able to pay debts, with little danger of trouble:

• Good Solvency: A very small Debt to Free Cash Flow ratio of 0.92 shows it could clear all its debt in under a year using current FCF, a mark of high financial soundness.
• Adequate Liquidity: A Current Ratio of 2.58 shows enough ability to cover near-term debts.
• Controlled Borrowing: With a Debt/Equity ratio of 0.28, the company is not too dependent on debt funding.

A Measured Review for GARP Investors

AngloGold Ashanti offers a detailed profile that fits well with the affordable growth search idea. The method purposely looks past basic growth figures to include valuation, profitability, and condition. This complete picture helps find companies like AU, where high growth is not a risky guess but is backed by quality earnings, effective capital use, and a strong balance sheet. The fair valuation multiples, especially on a forward-looking basis, imply the market may be offering this combination at a reachable starting price. Investors can look at the complete, itemized fundamental analysis report for AngloGold Ashanti for a more detailed look into each rating part.

For those wanting to find other companies that match similar standards of acceptable growth, fair valuation, and decent fundamentals, more study can be done using the set Affordable Growth stock screener.

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Disclaimer: This article is for information only and is not financial advice, a suggestion, or an offer or request to buy or sell any securities. The examination is based on fundamental data and ratings, which can change. Investing has risk, including the chance of losing the original amount. Always do your own research and think about your personal money situation and risk comfort before making any investment choices.