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Why I Like Questor Technology Inc. (CVE:QST)

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Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Questor Technology Inc. (CVE:QST) due to its excellent fundamentals in more than one area. QST is a financially-sound company with an impressive track record and a buoyant future outlook. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Questor Technology here.

Outstanding track record with high growth potential

In the previous year, QST has ramped up its bottom line by 33%, with its latest earnings level surpassing its average level over the last five years. The strong earnings growth is reflected in impressive double-digit 25% return to shareholders, which is an notable feat for the company.

TSXV:QST Past and Future Earnings, May 31st 2019
TSXV:QST Past and Future Earnings, May 31st 2019

QST's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. QST appears to have made good use of debt, producing operating cash levels of 12.34x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

TSXV:QST Historical Debt, May 31st 2019
TSXV:QST Historical Debt, May 31st 2019

Next Steps:

For Questor Technology, there are three key factors you should further research:

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  1. Valuation: What is QST worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether QST is currently mispriced by the market.

  2. Dividend Income vs Capital Gains: Does QST return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from QST as an investment.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of QST? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.