Is Now The Time To Look At Buying CITIC Limited (HKG:267)?

Today we're going to take a look at the well-established CITIC Limited (HKG:267). The company's stock saw a significant share price rise of 26% in the past couple of months on the SEHK. The recent share price gains has brought the company back closer to its yearly peak. As a large-cap stock, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at CITIC’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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Is CITIC Still Cheap?

According to our valuation model, CITIC seems to be fairly priced at around 11% below our intrinsic value, which means if you buy CITIC today, you’d be paying a fair price for it. And if you believe the company’s true value is HK$12.62, then there’s not much of an upside to gain from mispricing. In addition to this, CITIC has a low beta, which suggests its share price is less volatile than the wider market.

See our latest analysis for CITIC

What does the future of CITIC 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 a double-digit 13% over the next couple of years, the outlook is positive for CITIC. 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 267’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 267, now may not be the most advantageous 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, CITIC has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

If you are no longer interested in CITIC, 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.