Yahoo Finance Why Fundamental Investors Might Love Precision Tsugami (China) Corporation Limited (HKG:1651)
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I've been keeping an eye on Precision Tsugami (China) Corporation Limited (HKG:1651) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 1651 has a lot to offer. Basically, it is a financially-sound company with a a strong history of performance, trading at a great value. 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, read the full report on Precision Tsugami (China) here.
Flawless balance sheet and undervalued
In the previous year, 1651 has ramped up its bottom line by 84%, with its latest earnings level surpassing its average level over the last five years. This strong performance generated a robust double-digit return on equity of 23%, which is an optimistic signal for the future. 1651's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that 1651 manages its cash and cost levels well, which is a key determinant of the company’s health. Investors should not worry about 1651’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.
1651'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 1651's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the machinery industry, 1651 is also trading below its peers, relative to earnings generated. This bolsters the proposition that 1651's price is currently discounted.
Next Steps:
For Precision Tsugami (China), I've put together three important aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for 1651’s future growth? Take a look at our free research report of analyst consensus for 1651’s outlook.
Dividend Income vs Capital Gains: Does 1651 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 1651 as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1651? 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.
