Shares of Bank of East Asia Ltd (0023.HK) are moving on volatility today 0.29% or 0.10 from the open. The HKSE listed company saw a recent bid of 34.00 on 475128 volume.
A certain stock price rally by itself may not be sufficient evidence when making important investing decisions. To understand whether buying a stock at a higher price is justified by its long-term return potential, it is necessary to keep the finger on the pulse of underlying fundamentals. Following the latest data may help investors make the tough portfolio decisions. Investors may also want to set personal financial goals to help ensure that they are staying on the proper track. Financial professionals may be debating if global economic growth appears to be in a modest uptrend. This may have investors scrambling to study if developing markets are indeed growing with developed markets. This year could end up being the first year in a while where this has happened. The longer the bull market run, the tougher the investing decisions might be for the stock picker.
Now let’s take a look at how the fundamentals are stacking up for Environmental Group Ltd (EGL.AX). Fundamental analysis takes into consideration market, industry and stock conditions to help determine if the shares are correctly valued. Environmental Group Ltd currently has a yearly EPS of 0.01. This number is derived from the total net income divided by shares outstanding. In other words, EPS reveals how profitable a company is on a share owner basis.
Turning to Return on Assets or ROA, Environmental Group Ltd (EGL.AX) has a current ROA of 7.43. This is a profitability ratio that measures net income generated from total company assets during a given period. This ratio reveals how quick a company can turn it’s assets into profits. In other words, the ratio provides insight into the profitability of a firm’s assets. The ratio is calculated by dividing total net income by the average total assets. A higher ROA compared to peers in the same industry, would suggest that company management is able to effectively generate profits from their assets. Similar to the other ratios, a lower number might raise red flags about management’s ability when compared to other companies in a similar sector.
Another key indicator that can help investors determine if a stock might be a quality investment is the Return on Equity or ROE. Environmental Group Ltd (EGL.AX) currently has Return on Equity of 12.83. ROE is a ratio that measures profits generated from the investments received from shareholders. In other words, the ratio reveals how effective the firm is at turning shareholder investment into company profits. A company with high ROE typically reflects well on management and how well a company is run at a high level. A firm with a lower ROE might encourage potential investors to dig further to see why profits aren’t being generated from shareholder money.
Another ratio we can look at is the Return on Invested Capital or more commonly referred to as ROIC. Environmental Group Ltd (EGL.AX) has a current ROIC of 11.97. ROIC is calculated by dividing Net Income – Dividends by Total Capital Invested.
Similar to ROE, ROIC measures how effectively company management is using invested capital to generate company income. A high ROIC number typically reflects positively on company management while a low number typically reflects the opposite.
Investors often closely follow fundamental and technical data. Even with all the evidence, it can be tough to determine if the economy and the markets are preparing for a whole new breakout run. With the recent trend resulting in a series of new all-time record highs, investors will have to put the pieces together to try and gauge how long the second longest bull market in history will continue. Some professionals are still wondering if the next recession is looming, and if a bear market is right around the corner. Investors commonly strive to locate the highest probability of success. The next goal may be to capitalize on what could become the most interesting part of the record bull market. Investors will most likely be concentrating on what has proven to work in the past, which may offer a better idea as to how successful the strategies will be heading into the second half of the year and beyond.