Is Now The Time To Look At Buying Ningbo Shuanglin Auto Parts Co.,Ltd. (SZSE:300100)?

Ningbo Shuanglin Auto Parts Co.,Ltd. (SZSE:300100), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the SZSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Ningbo Shuanglin Auto PartsLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Ningbo Shuanglin Auto PartsLtd

Is Ningbo Shuanglin Auto PartsLtd Still Cheap?

Ningbo Shuanglin Auto PartsLtd appears to be overvalued by 32% at the moment, based on our discounted cash flow valuation. The stock is currently priced at CN¥29.98 on the market compared to our intrinsic value of CN¥22.65. This means that the opportunity to buy Ningbo Shuanglin Auto PartsLtd at a good price has disappeared! Another thing to keep in mind is that Ningbo Shuanglin Auto PartsLtd’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Ningbo Shuanglin Auto PartsLtd?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 40% over the next couple of years, the future seems bright for Ningbo Shuanglin Auto PartsLtd. 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 well and truly priced in 300100’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 300100 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 300100 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for 300100, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Ningbo Shuanglin Auto PartsLtd, and understanding it should be part of your investment process.

If you are no longer interested in Ningbo Shuanglin Auto PartsLtd, 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.