Should China Education Group Holdings Limited (HKG:839) Be Your Next Stock Pick?

Attractive stocks have exceptional fundamentals. In the case of China Education Group Holdings Limited (HKG:839), there’s is a company with strong financial health as well as a buoyant future outlook. In the following section, I expand a bit more on these key aspects. For those interested in digging a bit deeper into my commentary, take a look at the report on China Education Group Holdings here.

Excellent balance sheet with reasonable growth potential

839 is an attractive stock for growth-seeking investors, with an expected earnings growth of 24% in the upcoming year. The optimistic bottom-line growth is supported by an outstanding revenue growth of 72% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. 839 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that 839 manages its cash and cost levels well, which is a crucial insight into the health of the company. 839’s has produced operating cash levels of 2.56x total debt over the past year, which implies that 839’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

SEHK:839 Past and Future Earnings, August 22nd 2019
SEHK:839 Past and Future Earnings, August 22nd 2019

Next Steps:

For China Education Group Holdings, I’ve compiled three key aspects you should further examine:

  1. Historical Performance: What has 839’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. Valuation: What is 839 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 839 is currently mispriced by the market.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 839? 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.