Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Ten Pao Group Holdings Limited (HKG:1979) due to its excellent fundamentals in more than one area. 1979 is a company with an optimistic future outlook, which has not yet been priced into the stock. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Ten Pao Group Holdings here.

High growth potential and good value

1979’s cash-generating ability is outstanding, with analysts expecting its operating cash flows to more than double in the upcoming year. This is expected to flow down into an impressive return on equity of 22.2% over the next couple of years. 1979’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 1979’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, 1979’s share price is trading below the group’s average. This bolsters the proposition that 1979’s price is currently discounted.

Next Steps:

For Ten Pao Group Holdings, I’ve put together three key aspects you should look at:

1. Historical Performance: What has 1979’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.

2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1979? 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.