As an investor, I look for investments which do not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Kerry Logistics Network Limited (HKG:636), it is a financially-healthy company with an impressive history of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, read the full report on Kerry Logistics Network here.
Solid track record and good value
In the previous year, 636 has ramped up its bottom line by 88%, with its latest earnings level surpassing its average level over the last five years. In addition to beating its historical values, 636 also outperformed its industry, which delivered a growth of -24%. This is what investors like to see! 636'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 indicates that 636 has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. With a debt-to-equity ratio of 34%, 636’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future.
636's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Compared to the rest of the logistics industry, 636 is also trading below its peers, relative to earnings generated. This bolsters the proposition that 636's price is currently discounted.
For Kerry Logistics Network, there are three fundamental factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for 636’s future growth? Take a look at our free research report of analyst consensus for 636’s outlook.
- Dividend Income vs Capital Gains: Does 636 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 636 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 636? 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.