Reasons Why I Like Qantm Intellectual Property Limited (ASX:QIP)

Simply Wall St June 20, 2018
Qantm Intellectual Property Limited (ASX:QIP) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of QIP, it is a financially-sound company with a a buoyant growth outlook, not yet priced into the stock. 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 Qantm Intellectual Property here.

High growth potential with excellent balance sheet

QIP’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of QIP’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, QIP’s share price is trading below the group’s average. This bolsters the proposition that QIP’s price is currently discounted.

ASX:QIP Future Profit June 19th 18
ASX:QIP Future Profit June 19th 18

QIP’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 suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. QIP’s has produced operating cash levels of 1.63x total debt over the past year, which implies that QIP’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

ASX:QIP Historical Debt June 19th 18
ASX:QIP Historical Debt June 19th 18

Next Steps:

For Qantm Intellectual Property, I’ve compiled three relevant factors you should further research:

  1. Historical Performance: What has QIP’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. Dividend Income vs Capital Gains: Does QIP 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 QIP as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of QIP? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!