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Is this Large Market Cap Stock target price reasonable for China Telecom Corp. Ltd. (NYSE:CHA)?

The company in question is, China Telecom Corp. Ltd. (NYSE:CHA) currently with a stock price of 49.42 (1.16% today). The market cap for China Telecom Corp. Ltd. is 39953.31, and is in the sector Technology, and Telecom Services – Foreign industry. The target price for China Telecom Corp. Ltd. is 63.79. Currently China Telecom Corp. Ltd. is trading with a P/E of 15.34, and a forward P/E of 13.69. Average volume for China Telecom Corp. Ltd. is 35.55 and so far today it is 10742.

Performance in the last year for China Telecom Corp. Ltd. has been -16.46%. For EPS growth, China Telecom Corp. Ltd. has seen a growth of -25.90%, and is looking to grow in the next year to 21.22%. More long term stats show that EPS growth has been 7.10% over the last five years and could be 3.60% for the next five years. China Telecom Corp. Ltd. has seen sales growth quarter over quarter at -31.80%, with EPS growth quarter over quarter at 1.40%. The 20-day simple moving average is 7.04%, with the 200-day simple moving average coming to 2.06%.

Since the IPO date for China Telecom Corp. Ltd. on the 11/14/2002, China Telecom Corp. Ltd. has seen performance year to date to be 5.19%. With China Telecom Corp. Ltd. trading at 49.42, the dividend yield is 2.50%, and the EPS is 3.19.

So could China Telecom Corp. Ltd., be undervalued? Well as said before P/E is 15.34. The PEG is 4.26, P/S is 0.83 and the P/B is at 0.87. The P/cash is 7.76, with P/free cash flow at *TBA.

China Telecom Corp. Ltd. ability to deal with debt shows that the current ratio is 0.3, and the quick ratio is 0.3. This is with long term debt/equity at 0.21, and total debt/equity at 0.38.

In terms of margins, China Telecom Corp. Ltd. has a gross margin of 75.60%, an operating margin of 8.20% and a profit margin of *TBA.Payout ratio for China Telecom Corp. Ltd. is *TBA. Return on assets come to *TBA with return on investment coming to 4.70%.

Insider ownership for China Telecom Corp. Ltd., is at 45.30% and institutional ownership comes to 3.40%. Outstanding shares are at 817.71. While shares float is 13.74. The float short is currently 0.78%, and short ratio is 3.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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