Founded in 1964 | Under the establishment of Gold Peak Group in Hk | Largest consumer battery manufacturer in China
Couldn’t find a good company for comparison
1) IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.
- Price to book ratio : 0.577 (43.3% Below fair value)
- Price to earning ratio : 37.4 ( Above industry standard – 28.13)
2) LEARN ABOUT THEIR NUMBERS
- Debt To Equity : 77.73%
- Growth Performance : -16.81%
- Dividend Yield : 1.46[ 5 years]
- Current Ratio : 1.15
- Book Value per share : 1.43
- Cash Flow per share : 0.2108
- Average management ability ( Low dividend growth | Weak net income/gross profit margin | overall Positive cashflow)
3) Technical Analysis
Stock price of GP Batteries has been in a long term downtrend after 1994 high of $5.4. Since then, market has been stuck with bearish characteristic of lower highs and lows. Price action on the monthly and weekly, seems to state that market is consolidating. A live market execution order will put you in a 1 : 0.74 RR.
4) Would I be vested into it?
No! GP has definitely have alot of value being a household brand for many many years or many would remember it for its famous rechargeable batteries. My no is mainly because of my investment methodology as of now, It doesn’t fulfil my entry requirement. A Chance of a buy back might be made apparent if the company loses it’s “efficiency” in producing money for its parent company. Definitely a company to be put in my watch list.
- Company seems to be raking in alot of money but majority is going out to its stakeholders (good for investors)
- Cashflow is good while growth rate is low probably due to many new entry of “China made” batteries
- Market has been in downtrend from 94, which speaks alot about management ability.
- Long entry now doesn’t put my equity in a good position, then again, it might be a good price for fundamental investors.