Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Hi-P International Limited (SGX:H17) due to its excellent fundamentals in more than one area. H17 is a financially-sound company with a a strong track record 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 Hi-P International here.

Excellent balance sheet with solid track record and pays a dividend

H17 has a strong track record of performance. In the previous year, H17 delivered an impressive double-digit return of 23.2% Unsurprisingly, H17 surpassed the Electronic industry return of 8.7%, which gives us more confidence of the company’s capacity to drive earnings going forward. H17’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that H17 manages its cash and cost levels well, which is a key determinant of the company’s health. H17 seems to have put its debt to good use, generating operating cash levels of 0.8x 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.

H17’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, H17’s share price is trading below the group’s average. This further reaffirms that H17 is potentially undervalued.

Next Steps:

For Hi-P International, I’ve compiled three essential factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for H17’s future growth? Take a look at our free research report of analyst consensus for H17’s outlook.

2. Dividend Income vs Capital Gains: Does H17 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 H17 as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of H17? 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.