As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of China Hongqiao Group Limited (HKG:1378), it is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my high-level commentary, read the full report on China Hongqiao Group here.

Very undervalued with adequate balance sheet

1378’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 indicates that 1378 has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. 1378’s has produced operating cash levels of 0.37x total debt over the past year, which implies that 1378’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. 1378’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. 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. Compared to the rest of the metals and mining industry, 1378 is also trading below its peers, relative to earnings generated. This supports the theory that 1378 is potentially underpriced.

Next Steps:

For China Hongqiao Group, I’ve put together three essential factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for 1378’s future growth? Take a look at our free research report of analyst consensus for 1378’s outlook.

2. Historical Performance: What has 1378’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.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1378? 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.