Is Now The Time To Put Straco (SGX:S85) On Your Watchlist?

Straco Corporation Limited (SGX:S85) has been making waves in the leisure industry, with its recent financial performance catching the attention of investors. But the question remains: is now the time to put Straco on your watchlist? Let's dive into the data and find out.

Straco's stock has underperformed both the SG Hospitality industry and the broader SG Market over the past year, with a return of -13.9% compared to -10.1% and 17.1% respectively. However, this underperformance may present an opportunity for investors looking for a bargain in the leisure sector.

One of the key factors driving Straco's recent financial performance is its expansion and diversification strategy. The company operates in two main segments: Aquariums and Giant Observation Wheel (GOW). By expanding its operations in both segments and acquiring new attractions, Straco has been able to tap into new markets and revenue streams, contributing to its financial growth.

However, Straco's financial performance has been volatile in recent years, with earnings declining by 20.9% per year over the past five years. This volatility, coupled with an unstable dividend track record, may give investors pause. Nevertheless, Straco's strong financial health, with a current ratio of 13.21 and a Debt/Equity ratio of 0.17, indicates that the company is well-positioned to weather market fluctuations.

Straco's valuation appears to be lower than that of its peers in the leisure industry, with a trailing PE ratio of 12.50 compared to the industry average of around 15.00. Additionally, Straco's strong financial health, as evidenced by its Altman Z-Score of 5.02, suggests that the company is in a solid financial position.

In conclusion, Straco Corporation Limited (SGX:S85) may be an attractive addition to your watchlist, given its expansion and diversification strategy, strong financial health, and undervalued valuation compared to its peers. However, investors should be aware of the company's volatile financial performance and unstable dividend track record. By closely monitoring Straco's progress and staying informed about market conditions, investors can make a more informed decision about whether to add Straco to their portfolios.

As always, it's essential to conduct thorough research and consider your risk tolerance before making any investment decisions.