Reasons Why I Like Christie Group plc (LON:CTG)

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Christie Group plc (LON:CTG) due to its excellent fundamentals in more than one area. CTG is a financially-healthy company with a a great track record of performance, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Christie Group here.

Good value with proven track record

In the previous year, CTG has ramped up its bottom line by 75.40%, with its latest earnings level surpassing its average level over the last five years. Not only did CTG outperformed its past performance, its growth also exceeded the Professional Services industry expansion, which generated a 3.94% earnings growth. This is an optimistic signal for the future. CTG’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that CTG manages its cash and cost levels well, which is an important determinant of the company’s health. CTG appears to have made good use of debt, producing operating cash levels of 0.67x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

AIM:CTG Income Statement June 15th 18
AIM:CTG Income Statement June 15th 18

CTG’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. Also, relative to the rest of its peers with similar levels of earnings, CTG’s share price is trading below the group’s average. This supports the theory that CTG is potentially underpriced.

AIM:CTG Intrinsic Value June 15th 18
AIM:CTG Intrinsic Value June 15th 18

Next Steps:

For Christie Group, there are three key aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for CTG’s future growth? Take a look at our free research report of analyst consensus for CTG’s outlook.
  2. Dividend Income vs Capital Gains: Does CTG 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 CTG as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of CTG? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!