NASDAQ:HOLI, an undervalued stock with good fundamentals.

HOLLYSYS AUTOMATION TECHNOLO (NASDAQ:HOLI) was identified as a decent value stock by our stock screener. NASDAQ:HOLI scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Valuation Insights: NASDAQ:HOLI

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NASDAQ:HOLI has earned a 7 for valuation:

• HOLI's Price/Earnings ratio is rather cheap when compared to the industry. HOLI is cheaper than 83.33% of the companies in the same industry.
• HOLI is valuated rather cheaply when we compare the Price/Earnings ratio to 25.97, which is the current average of the S&P500 Index.
• The Price/Forward Earnings ratio is 10.96, which indicates a very decent valuation of HOLI.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of HOLI indicates a rather cheap valuation: HOLI is cheaper than 89.68% of the companies listed in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 22.31. HOLI is valued rather cheaply when compared to this.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HOLI indicates a rather cheap valuation: HOLI is cheaper than 82.54% of the companies listed in the same industry.
• HOLI's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of HOLI may justify a higher PE ratio.
• A more expensive valuation may be justified as HOLI's earnings are expected to grow with 17.20% in the coming years.

Profitability Examination for NASDAQ:HOLI

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:HOLI was assigned a score of 7 for profitability:

• With an excellent Return On Assets value of 6.63%, HOLI belongs to the best of the industry, outperforming 80.16% of the companies in the same industry.
• HOLI has a better Return On Equity (9.77%) than 70.63% of its industry peers.
• The Return On Invested Capital of HOLI (7.58%) is better than 68.25% of its industry peers.
• The last Return On Invested Capital (7.58%) for HOLI is above the 3 year average (6.19%), which is a sign of increasing profitability.
• HOLI has a Profit Margin of 14.52%. This is amongst the best in the industry. HOLI outperforms 92.86% of its industry peers.
• The Operating Margin of HOLI (13.72%) is better than 87.30% of its industry peers.
• HOLI has a better Gross Margin (33.67%) than 61.11% of its industry peers.

Deciphering NASDAQ:HOLI's Health Rating

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:HOLI, the assigned 5 for health provides valuable insights:

• HOLI has an Altman-Z score of 3.86. This indicates that HOLI is financially healthy and has little risk of bankruptcy at the moment.
• HOLI has a Altman-Z score of 3.86. This is in the better half of the industry: HOLI outperforms 67.46% of its industry peers.
• A Debt/Equity ratio of 0.04 indicates that HOLI is not too dependend on debt financing.
• HOLI has a Current Ratio of 3.01. This indicates that HOLI is financially healthy and has no problem in meeting its short term obligations.
• Looking at the Current ratio, with a value of 3.01, HOLI is in the better half of the industry, outperforming 60.32% of the companies in the same industry.
• A Quick Ratio of 2.78 indicates that HOLI has no problem at all paying its short term obligations.
• Looking at the Quick ratio, with a value of 2.78, HOLI is in the better half of the industry, outperforming 69.84% of the companies in the same industry.

Assessing Growth for NASDAQ:HOLI

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:HOLI boasts a 6 out of 10:

• The Earnings Per Share has grown by an impressive 28.94% over the past year.
• Looking at the last year, HOLI shows a quite strong growth in Revenue. The Revenue has grown by 11.48% in the last year.
• The Earnings Per Share is expected to grow by 17.20% on average over the next years. This is quite good.
• The Revenue is expected to grow by 15.31% on average over the next years. This is quite good.
• When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
• When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

Check the latest full fundamental report of HOLI for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.