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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Chemical Industries (Far East) Limited (SGX:C05) due to its excellent fundamentals in more than one area. C05 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, take a look at the report on Chemical Industries (Far East) here.
Flawless balance sheet and undervalued
C05 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that C05 manages its cash and cost levels well, which is an important determinant of the company’s health. C05's has produced operating cash levels of 778x total debt over the past year, which implies that C05's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. C05's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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. Also, relative to the rest of its peers with similar levels of earnings, C05's share price is trading below the group's average. This bolsters the proposition that C05's price is currently discounted.
For Chemical Industries (Far East), I've compiled three important factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for C05’s future growth? Take a look at our free research report of analyst consensus for C05’s outlook.
- Historical Performance: What has C05'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 C05? 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 email@example.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.