In today's video I look at fundamentals, valuation metrics, and recent news for Huya (NYSE:HUYA) and Douyu (NASDAQ:DOYU). Below I share a few highlights from the video. 

  1. Huya and Douyu are live streaming platforms in China that have announced a merger agreement. On July 12, 2021, both companies released statements reporting the termination of the contract after China's market regulators prohibited the merger. 
  2. Huya and Douyu show strong fundamentals in their trailing 12 months. Both companies reported positive cash flow from operations and have profitable earnings, substantial cash and short-term investments, and no debt. 
  3. The forward-price-to-sales ratio for Huya has fallen dramatically and is at levels seen during the first half of 2020. The correction could be providing long-term investors with a buying opportunity. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the midday prices of July 12, 2021. The video was published on July 12, 2021.

 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.