Attractive stocks have exceptional fundamentals. In the case of Wong's International Holdings Limited (HKG:99), there's is a financially-sound company with a great history of performance, trading at a discount. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the full report on Wong's International Holdings here.
Undervalued with solid track record
99 delivered a triple-digit bottom-line expansion over the past couple of years, with its most recent earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 29% return to shareholders, which is what investors like to see! 99'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 implies that 99 manages its cash and cost levels well, which is a crucial insight into the health of the company. Debt funding requires timely payments on interest to lenders. 99’s earnings sufficiently covered its interest in the prior year, which indicates there’s low risk associated with the company not being able to meet these key expenses.
99 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 99's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the electronic industry, 99 is also trading below its peers, relative to earnings generated. This supports the theory that 99 is potentially underpriced.
For Wong's International Holdings, there are three essential aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for 99’s future growth? Take a look at our free research report of analyst consensus for 99’s outlook.
- Dividend Income vs Capital Gains: Does 99 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 99 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 99? 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.