Hollysys Stock Story

HOLI -  USA Stock  

USD 15.09  0.13  0.85%

As many baby boomers are still indifferent towards industrials space, it makes sense to concentrate on Hollysys Automation. We will try to explain if it is still possible for Hollysys Automation to generate above-average margins. Is the firm current valuation justified for 2022? Here i will cover my perspective on valuation to give Hollysys stockholders a better outlook on taking a position in the stock.
Published over three months ago
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Is Hollysys Automation well positioned for February economic uncertainties?
The company currently holds 22.31 M in liabilities with Debt to Equity (D/E) ratio of 0.02, which may suggest Hollysys Automation is not taking enough advantage from borrowing. Hollysys Automation is UNDERVALUED at 17.81 per share with modest projections ahead.
We determine the current worth of Hollysys Automation using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Hollysys Automation based exclusively on its fundamental and basic technical indicators. By analyzing Hollysys Automation's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Hollysys Automation's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Hollysys Automation. We calculate exposure to Hollysys Automation's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Hollysys Automation's related companies.

Hollysys Automation Investment Alerts

Hollysys investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Hollysys Automation performance across your portfolios.Please check all investment alerts for Hollysys

Hollysys Automation Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Hollysys value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Hollysys Automation competition to find correlations between indicators driving the intrinsic value of Hollysys.

How does Hollysys utilize its cash?

To perform a cash flow analysis of Hollysys Automation, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Hollysys Automation is receiving and how much cash it distributes out in a given period. The Hollysys Automation cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Hollysys Automation Net Cash Flow from Operations is most likely to increase significantly in the upcoming years. The last year's value of Net Cash Flow from Operations was reported at 91.18 Million

An Additional Perspective On Hollysys Automation

Hollysys Automation reported the previous year's revenue of 563.92 M. Net Income was 69.49 M with profit before overhead, payroll, taxes, and interest of 190.57 M.
 2018 2019 2021 2022 (projected)
Cost of Revenue359.18 M312.76 M359.67 M356.74 M
Consolidated Income125.54 M79.33 M91.22 M95.83 M

Margins Breakdown

Hollysys profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Hollysys Automation itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Hollysys Automation profit margins.
Profit Margin
EBITDA Margin0.26
Gross Margin0.45
Profit Margin0.2

Hollysys Automation Average Assets is increasing over the last 8 years. Also, Hollysys Automation Average Equity is nearly stable at the moment.

Will Hollysys continue to rise?

The market risk adjusted performance is down to 17.58 as of today. Hollysys Automation exhibits very low volatility with skewness of -3.04 and kurtosis of 17.96. However, we advise investors to further study Hollysys Automation technical indicators to make sure all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Hollysys Automation's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Hollysys Automation's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Hollysys Automation Implied Volatility

Hollysys Automation's implied volatility exposes the market's sentiment of Hollysys Automation stock's possible movements over time. However, it does not forecast the overall direction of its price. In a nutshell, if Hollysys Automation's implied volatility is high, the market thinks the stock has potential for high price swings in either direction. On the other hand, the low implied volatility suggests that Hollysys Automation stock will not fluctuate a lot when Hollysys Automation's options are near their expiration.

Our Final Take On Hollysys Automation

While some firms within the electrical equipment & parts industry are still a little expensive, even after the recent corrections, Hollysys Automation may offer a potential longer-term growth to stockholders. To conclude, as of the 21st of January 2022, our final 90 days buy-or-sell advice on the company is Strong Hold. We believe Hollysys Automation is undervalued with very small probability of bankruptcy for the next two years.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Hollysys Automation. Please refer to our Terms of Use for any information regarding our disclosure principles.

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