Why Fundamental Investors Love Hexindai Inc (NASDAQ:HX)

Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Hexindai Inc (NASDAQ:HX) due to its excellent fundamentals in more than one area. HX is a financially-robust company with an impressive history and an optimistic growth outlook. Below, I’ve touched on some key aspects you should know on a high level. If you’re interested in understanding beyond my high-level commentary, read the full report on Hexindai here.

Exceptional growth potential with flawless balance sheet

Bullish market analysts are forecasting fast-growing HX to deliver an exceptional triple-digit sales growth rate over the next year. This is expected to flow down into an impressive return on equity of 36.82% over the next couple of years. Over the past few years, HX has more than doubled its earnings, with its most recent figure exceeding its annual average over the past five years. The strong earnings growth is reflected in impressive double-digit 46.78% return to shareholders, which is what investors like to see!

NasdaqGM:HX Future Profit August 2nd 18
NasdaqGM:HX Future Profit August 2nd 18

HX’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that HX has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. Looking at HX’s capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. Therefore the company has plenty of headroom to grow, and the ability to raise debt should it need to in the future.

NasdaqGM:HX Historical Debt August 2nd 18
NasdaqGM:HX Historical Debt August 2nd 18

Next Steps:

For Hexindai, there are three pertinent factors you should further research:

  1. Valuation: What is HX 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 HX is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does HX 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 HX as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HX? 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.