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$18.92 and falling to the lows of HK$12.66. 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$12.66 reflective of the actual value of the small-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.
Is AAC Technologies Holdings Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 7.9% below my intrinsic value, which means if you buy AAC Technologies Holdings today, you’d be paying a fair price for it. And if you believe that the stock is really worth HK$13.75, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, AAC Technologies Holdings’s low beta implies that the stock is less volatile than the wider market.
Can we expect growth from AAC Technologies Holdings?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 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 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 conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on 2018, 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.
If you'd like to know more about AAC Technologies Holdings as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that AAC Technologies Holdings has 1 warning sign and it would be unwise to ignore it.
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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.
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|Analysis Area||Score (0-6)|
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Excellent balance sheet with reasonable growth potential.