Attractive stocks have exceptional fundamentals. In the case of CTI Logistics Limited (ASX:CLX), there’s is a financially-healthy company with a an optimistic growth outlook, not yet factored into the price. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on CTI Logistics here.
Established dividend payer and good value
Investors in search for stocks with room to flourish should look no further than CLX, with its expected earinngs growth of 21%, made up of high-quality, operational cash from its core business, which is expected to increase by 71% next year. This indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. CLX’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if CLX’s projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Compared to the rest of the logistics industry, CLX is also trading below its peers, relative to earnings generated. This bolsters the proposition that CLX’s price is currently discounted.
CLX is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. CLX appears to have made good use of debt, producing operating cash levels of 0.2x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
Next Steps:
For CTI Logistics, I’ve put together three relevant factors you should further research:
- Historical Performance: What has CLX’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.
- Dividend Income vs Capital Gains: Does CLX 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 CLX as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CLX? 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.