Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Kingboard Chemical Holdings Limited (SEHK:148) due to its excellent fundamentals in more than one area. 148 is a financially-robust company with a a strong history of performance, trading at a great value. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Kingboard Chemical Holdings here.
Undervalued with excellent balance sheet and pays a dividend
148’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 148 has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. With a debt-to-equity ratio of 35.53%, 148’s debt level is reasonable. This implies that 148 has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt.
148 is currently trading below its true value, which means the market is undervaluing the company’s expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if 148’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, 148’s share price is trading below the group’s average. This supports the theory that 148 is potentially underpriced.
For Kingboard Chemical Holdings, I’ve compiled three pertinent aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for 148’s future growth? Take a look at our free research report of analyst consensus for 148’s outlook.
- Dividend Income vs Capital Gains: Does 148 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 148 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 148? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.