Why Hanwa Co., Ltd. (TSE:8078) Could Be Worth Watching

While Hanwa Co., Ltd. (TSE:8078) might not have the largest market cap around , it saw a decent share price growth of 15% on the TSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Hanwa’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Hanwa

What Is Hanwa Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 10.90% above our intrinsic value, which means if you buy Hanwa today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth ¥5644.83, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Hanwa’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Hanwa?

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. However, with a relatively muted profit growth of 8.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Hanwa, at least in the short term.

What This Means For You

Are you a shareholder? 8078’s 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 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 8078, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've found that Hanwa has 2 warning signs (1 shouldn't be ignored!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Hanwa, 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.