- Hong Kong
- Electronic Equipment and Components
Is It Too Late To Consider Buying AAC Technologies Holdings Inc. (HKG:2018)?
AAC Technologies Holdings Inc. (HKG:2018), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$22.30 and falling to the lows of HK$16.36. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether AAC Technologies Holdings' current trading price of HK$16.36 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at AAC Technologies Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for AAC Technologies Holdings
Is AAC Technologies Holdings Still Cheap?
AAC Technologies Holdings appears to be overvalued by 35% at the moment, based on my discounted cash flow valuation. The stock is currently priced at HK$16.36 on the market compared to my intrinsic value of HK$12.15. This means that the opportunity to buy AAC Technologies Holdings at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that AAC Technologies Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from AAC Technologies Holdings?
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 more than double over the next couple of years, the future seems bright for AAC Technologies Holdings. 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? 2018’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 2018 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 2018 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 2018, 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 AAC Technologies Holdings, and understanding this should be part of your investment process.
If you are no longer interested in AAC Technologies Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Valuation is complex, but we're helping make it simple.
Find out whether AAC Technologies Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
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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.
AAC Technologies Holdings
AAC Technologies Holdings Inc., an investment holding company, provides solutions for smart devices in Mainland China, Hong Kong Special Administrative Region of the People’s Republic of China, Taiwan, other Asian countries, the United States, and Europe.
Reasonable growth potential with adequate balance sheet.