Fact based stock research
Cathay Consolidated (TWSE:1342)

TW0001342004

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Cathay Consolidated stock research in summary

cathayconsolidated.com

ANALYSIS: With an Obermatt Combined Rank of 62 (better than 62% compared with investment alternatives), Cathay Consolidated (Textiles, Taiwan) shares have above-average financial characteristics compared with similar stocks. Shares of Cathay Consolidated are low in value (priced high) with a consolidated Value Rank of 35 (worse than 65% of alternatives) and show below-average growth (Growth Rank of 43) but are safely financed (Safety Rank of 81), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 62, is a buy recommendation based on Cathay Consolidated's financial characteristics. As the company Cathay Consolidated's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 35) and low growth (Obermatt Growth Rank of 43), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 81) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	35
Growth Rank	43
Safety Rank	81
Combined Rank	62

Country	Taiwan
Industry	Textiles
Index	FTSE Taiwan
Size class	X-Small

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Cathay Consolidated

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	13	27	35
GROWTH
GROWTH	n/a	97	43	43
SAFETY
SAFETY	n/a	83	62	81
SENTIMENT
SENTIMENT	n/a	61	90	^new
360° VIEW
360° VIEW	n/a	78	60	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Cathay Consolidated is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	13	27	35
GROWTH
GROWTH	n/a	97	43	43
SAFETY
SAFETY	n/a	83	62	81
COMBINED
COMBINED	n/a	73	45	62

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Cathay Consolidated the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 35 (worse than 65% compared with alternatives), Cathay Consolidated shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cathay Consolidated. Price-to-Profit (also referred to as price-earnings, P/E) is 56 which means that the stock price compared with what market professionals expect for future profits is lower than for 56% of comparable companies, indicating a good value concerning Cathay Consolidated's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 18, which means that the stock price is lower as regards to invested capital than for 18% of comparable investments. On the other hand, Price-to-Sales is less favorable than 90% of alternatives (only 10% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 9% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 35, is a hold recommendation based on Cathay Consolidated's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	18	9	10
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	44	42	56
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	24	12	18
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	85	91
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	13	27	35

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Cathay Consolidated; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 43 (better than 43% compared with alternatives), Cathay Consolidated shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Cathay Consolidated. Sales Growth has a rank of 59 which means that currently, professionals expect the company to grow more than 59% of its competitors. Capital Growth is also above 22% of competitors with a rank of 87. But Profit Growth only has a rank of 22, which means that currently professionals expect the company to grow its profits less than 78% of its competitors. And Stock Returns have also been below average with a rank of only 27. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 43, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	85	80	59
PROFIT GROWTH
PROFIT GROWTH	n/a	68	70	22
CAPITAL GROWTH
CAPITAL GROWTH	n/a	78	18	87
STOCK RETURNS
STOCK RETURNS	n/a	67	21	27
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	97	43	43

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Cathay Consolidated.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 81 (better than 81% compared with alternatives) for 2024, the company Cathay Consolidated has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Cathay Consolidated is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Cathay Consolidated. Leverage is at a rank of 64, meaning the company has a below-average debt-to-equity ratio. It has less debt than 64% of its competitors. Liquidity is also good at a rank of 94, meaning the company generates more profit to service its debt than 94% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 39, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 61% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 81 (better than 81% compared with alternatives), Cathay Consolidated has a financing structure that is significantly safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Cathay Consolidated. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Cathay Consolidated and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	78	62	64
REFINANCING
REFINANCING	n/a	51	31	39
LIQUIDITY
LIQUIDITY	n/a	72	83	94
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	83	62	81

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Cathay Consolidated and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	100	29	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	2	95	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	66	71	^new
MARKET PULSE
MARKET PULSE	n/a	100	100	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	61	90	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Cathay Consolidated.
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