In This Article:
Attractive stocks have exceptional fundamentals. In the case of China Traditional Chinese Medicine Holdings Co Limited (HKG:570), there’s is a financially-sound company with a a strong history superior dividend payments, 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 China Traditional Chinese Medicine Holdings here.
Excellent balance sheet, good value and pays a dividend
570’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 570 manages its cash and cost levels well, which is a key determinant of the company’s health. 570 seems to have put its debt to good use, generating operating cash levels of 0.24x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. 570’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if 570’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the pharmaceuticals industry, 570 is also trading below its peers of similar sizes in terms of their assets. This supports the theory that 570 is potentially underpriced.
Income investors would also be happy to know that 570 is a great dividend company, with a current yield standing at 1.7%. 570 has also been regularly increasing its dividend payments to shareholders over the past decade.
Next Steps:
For China Traditional Chinese Medicine Holdings, I’ve put together three essential aspects you should further research:
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Future Outlook: What are well-informed industry analysts predicting for 570’s future growth? Take a look at our free research report of analyst consensus for 570’s outlook.
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Historical Performance: What has 570’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.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 570? 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 past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.