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Attractive stocks have exceptional fundamentals. In the case of HiTech Group Australia Limited (ASX:HIT), there's is a financially-healthy company with a an impressive history of performance, trading at a discount. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, read the full report on HiTech Group Australia here.
Flawless balance sheet and good value
HIT delivered a satisfying double-digit returns of 38% in the most recent year Not surprisingly, HIT outperformed its industry which returned 16%, giving us more conviction of the company's capacity to drive bottom-line growth going forward. HIT's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that HIT manages its cash and cost levels well, which is a crucial insight into the health of the company. HIT currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
HIT's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if HIT's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the professional services industry, HIT is also trading below its peers, relative to earnings generated. This supports the theory that HIT is potentially underpriced.
For HiTech Group Australia, I've compiled three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for HIT’s future growth? Take a look at our free research report of analyst consensus for HIT’s outlook.
- Dividend Income vs Capital Gains: Does HIT 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 HIT as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HIT? 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.