Is It Time To Consider Buying Sany Heavy Industry Co.,Ltd (SHSE:600031)?

Today we're going to take a look at the well-established Sany Heavy Industry Co.,Ltd (SHSE:600031). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the SHSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a large-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 Sany Heavy IndustryLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Sany Heavy IndustryLtd

What Is Sany Heavy IndustryLtd Worth?

According to our valuation model, Sany Heavy IndustryLtd seems to be fairly priced at around 12% below our intrinsic value, which means if you buy Sany Heavy IndustryLtd today, you’d be paying a fair price for it. And if you believe the company’s true value is CN¥19.39, then there’s not much of an upside to gain from mispricing. Furthermore, Sany Heavy IndustryLtd’s low beta implies that the stock is less volatile than the wider market.

What does the future of Sany Heavy IndustryLtd look like?

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 76% over the next couple of years, the future seems bright for Sany Heavy IndustryLtd. 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 600031’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 financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on 600031, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 1 warning sign for Sany Heavy IndustryLtd you should know about.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.