In This Article:
Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on iDreamSky Technology Holdings Limited (HKG:1119) due to its excellent fundamentals in more than one area. 1119 is a company with strong financial health as well as an optimistic future outlook. 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, take a look at the report on iDreamSky Technology Holdings here.
High growth potential with adequate balance sheet
One reason why investors are attracted to 1119 is its earnings growth potential in the near future of 37% which is expected to flow into an impressive return on equity of 21% over the next couple of years. 1119 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. With a debt-to-equity ratio of 27%, 1119’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future.
Next Steps:
For iDreamSky Technology Holdings, there are three relevant factors you should further research:
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Historical Performance: What has 1119'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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Valuation: What is 1119 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 1119 is currently mispriced by the market.
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Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1119? 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.