Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Automated Systems Holdings Limited (HKG:771) due to its excellent fundamentals in more than one area. 771 is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Automated Systems Holdings here.
Good value with adequate balance sheet
771's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. 771 seems to have put its debt to good use, generating operating cash levels of 0.33x 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. 771 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if 771's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, 771's share price is trading below the group's average. This bolsters the proposition that 771's price is currently discounted.
For Automated Systems Holdings, I've put together three relevant factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for 771’s future growth? Take a look at our free research report of analyst consensus for 771’s outlook.
- Historical Performance: What has 771's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 771? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
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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.