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Stock market crashes are an opportune time to buy. High quality companies, such as Venture Corporation Limited, are impacted by general market panic and sell-off, but the fundamentals of these companies stay the same. In other words, now is the time to buy strong, well-proven stocks at an attractive discount.
See our latest analysis for Venture
Venture Corporation Limited provides technology solutions, products, and services in Singapore, other countries in the Asia Pacific, and internationally. Established in 1984, and led by CEO Ngit Wong, the company employs 12.00k people and with the company’s market capitalisation at S$4.3b, we can put it in the mid-cap group. Typically, large companies are well-established and highly resourced, meaning that stock market volatility may impact some short-term strategic decisions but unlikely to matter in the long run. Therefore, large-cap stocks are a safe bet to buy more of when the general market is selling off.
With S$18m debt on its books, Venture has to pay interest periodically. This means it needs to have enough cash on hand to meet these upcoming expenses. With interest income higher than interest payments, meeting these short-term debt obligations isn’t a problem for Venture. Furthermore, its operating cash flows amply covers its total debt by more than 2x, which is higher than the bare minimum requirement of 0.2x. Its cash and short-term investment is also sufficient to cover other upcoming liabilities, which means V03 is financially robust in the face of a volatile market.
V03’s year-on-year earnings growth has been positive over the past five years, with an average annual growth rate of 32%, overtaking the industry growth rate of 8.7%. It has also returned an ROE of 15% recently, above the industry return of 8.7%. This consistent market outperformance illustrates a robust track record of delivering strong returns over a number of years, increasing my conviction in Venture as an investment over the long run.
Next Steps:
Based on these three factors, V03 makes for a strong long-term investment in the face of a fickle stock market. If you’re a risk averse investor, lining your portfolio with proven companies you’re willing to buy more and more of as the price falls, is a good strategy to build your wealth over the long run. This is the beginning of your research, but before you decide to buy V03, I highly urge you to understand more about the company, in particular, in these following areas:- Future Outlook: What are well-informed industry analysts predicting for V03’s future growth? Take a look at our free research report of analyst consensus for V03’s outlook.
- Valuation: What is V03 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 V03 is currently mispriced by the market.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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.