At CN¥8.06, Is It Time To Put Shandong Weida Machinery Co., Ltd. (SZSE:002026) On Your Watch List?

Shandong Weida Machinery Co., Ltd. (SZSE:002026), might not be a large cap stock, but it saw a significant share price rise of 32% in the past couple of months on the SZSE. While good news for shareholders, the company has traded much higher in the past year. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at Shandong Weida Machinery’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Shandong Weida Machinery

Is Shandong Weida Machinery Still Cheap?

Shandong Weida Machinery appears to be overvalued by 25% at the moment, based on our discounted cash flow valuation. The stock is currently priced at CN¥8.06 on the market compared to our intrinsic value of CN¥6.44. Not the best news for investors looking to buy! Another thing to keep in mind is that Shandong Weida Machinery’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.

What kind of growth will Shandong Weida Machinery generate?

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. 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 a double-digit 13% in the upcoming year, the short-term outlook is positive for Shandong Weida Machinery. 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 002026’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe 002026 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 002026 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 positive outlook is encouraging for 002026, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Diving deeper into the forecasts for Shandong Weida Machinery mentioned earlier will help you understand how analysts view the stock going forward. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Shandong Weida Machinery, 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.