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These Factors Make Man Wah Holdings Limited (HKG:1999) An Interesting Investment

Simply Wall St

As an investor, I look for investments which does 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 Man Wah Holdings Limited (HKG:1999), it 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 Man Wah Holdings here.

Good value with adequate balance sheet

1999's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 1999 has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. 1999 appears to have made good use of debt, producing operating cash levels of 0.25x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated. 1999'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 consumer durables industry, 1999 is also trading below its peers, relative to earnings generated. This bolsters the proposition that 1999's price is currently discounted.

SEHK:1999 Intrinsic value, September 19th 2019

Next Steps:

For Man Wah Holdings, there are three essential aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for 1999’s future growth? Take a look at our free research report of analyst consensus for 1999’s outlook.
  2. Historical Performance: What has 1999'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.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1999? 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 editorial-team@simplywallst.com. 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.