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HKR International Limited (HKG:480) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of 480, it is a financially-healthy company with a an impressive history of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on HKR International here.
Undervalued with proven track record
480 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. In addition to beating its historical values, 480 also outperformed its industry, which delivered a growth of 6.2%. This is what investors like to see! 480's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 480 has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. 480’s debt-to-equity ratio stands at 35%, which means its debt level is acceptable. This implies that 480 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.
480's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 480's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, 480's share price is trading below the group's average. This further reaffirms that 480 is potentially undervalued.
Next Steps:
For HKR International, I've put together three important aspects you should further examine:
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Future Outlook: What are well-informed industry analysts predicting for 480’s future growth? Take a look at our free research report of analyst consensus for 480’s outlook.
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Dividend Income vs Capital Gains: Does 480 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 480 as an investment.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 480? 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 editorial-team@simplywallst.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.