China Display Optoelectronics Technology Holdings Limited (HKG:334), a tech company based in China, saw significant share price volatility over the past couple of months on the SEHK, rising to the highs of HK$0.83 and falling to the lows of HK$0.59. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether China Display Optoelectronics Technology Holdings’s current trading price of HK$0.60 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 China Display Optoelectronics Technology Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What’s the opportunity in China Display Optoelectronics Technology Holdings?Good news, investors! China Display Optoelectronics Technology Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is HK$1.19, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because China Display Optoelectronics Technology Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from China Display Optoelectronics Technology Holdings?Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. China Display Optoelectronics Technology Holdings’s earnings over the next few years are expected to increase by 36.07%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since 334 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on 334 for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 334. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on China Display Optoelectronics Technology Holdings. You can find everything you need to know about China Display Optoelectronics Technology Holdings in the latest infographic research report. If you are no longer interested in China Display Optoelectronics Technology Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.