When Should You Buy Zhejiang Yinlun Machinery Co.,Ltd. (SZSE:002126)?

Zhejiang Yinlun Machinery Co.,Ltd. (SZSE:002126), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the SZSE. The recent share price gains has brought the company back closer to its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Zhejiang Yinlun MachineryLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Zhejiang Yinlun MachineryLtd

What Is Zhejiang Yinlun MachineryLtd Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 20% below our intrinsic value, which means if you buy Zhejiang Yinlun MachineryLtd today, you’d be paying a fair price for it. And if you believe that the stock is really worth CN¥25.15, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Zhejiang Yinlun MachineryLtd’s share price may be more stable over time (relative to the market), as indicated by its low beta.

Can we expect growth from Zhejiang Yinlun MachineryLtd?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 70% over the next couple of years, the future seems bright for Zhejiang Yinlun MachineryLtd. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 002126’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 002126, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Zhejiang Yinlun MachineryLtd, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.