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Luk Fook Holdings is scheduled to announce its earnings today. As many of us are excited about consumer cyclical space, it is fair to digest Luk Fook Holdings as a unique alternative. We will check if the company can maintain a respectable level of debt while minimizing operating losses. Here we also measure the ability of Luk Fook to meet its long-term debt obligations, such as interest payments on debt, the final principal payment on the debt, and any other fixed obligations like lease payments.
Published over two weeks ago
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Does Luk Fook (OTC:LKFLF) has enough cash to last in September?
This firm has accumulated 224.54 M in total debt with debt to equity ratio (D/E) of 0.22, which may suggest Luk Fook is not taking enough advantage from borrowing. The company has a current ratio of 3.54, suggesting that it is liquid and has the ability to pay its financial obligations in time and when they become due. About 45.0% of the company outstanding shares are owned by corporate insiders. Luk Fook Holdings has price-to-book ratio of 1.05. Typically companies with comparable Price to Book (P/B) are able to outperform the market in the long run. The entity last dividend was issued on the 24th of August 2020.

How important is Luk Fook's Liquidity

Luk Fook financial leverage refers to using borrowed capital as a funding source to finance Luk Fook Holdings ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Luk Fook financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Luk Fook's total debt and its cash.

How LKFLF utilizes its cash?

To perform a cash flow analysis of Luk Fook, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Luk Fook is receiving and how much cash it distributes out in a given period. The Luk Fook cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

What is driving Luk Fook Investor Appetite?

Luk Fook Holdings reported the revenue of 2.06 B. Net Income was 192.94 M with profit before overhead, payroll, taxes, and interest of 3.32 B.

Our take on today Luk Fook surge

Luk Fook latest market risk adjusted performance ascents over 1.19. Luk Fook Holdings is showing large volatility of returns over the selected time horizon. We encourage all investors to investigate this asset further to make sure related market timing strategies are aligned with all the expectations about Luk Fook implied risk.

Our Conclusion on Luk Fook

Although many of the other players under the luxury goods industry are still a bit expensive, Luk Fook may offer a potential longer-term growth to shareholders. To conclude, as of the 28th of August 2020, our analysis shows that Luk Fook follows the market closely. The firm is overvalued and projects low probability of financial unrest for the next 2 years. Our current 30 days 'Buy-vs-Sell' recommendation on the firm is Strong Sell.

About Contributor

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 Raphi Shpitalnik do not own shares of Luk Fook Holdings. Please refer to our Terms of Use for any information regarding our disclosure principles.

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