Should You Think About Buying Krosaki Harima Corporation (TSE:5352) Now?

While Krosaki Harima Corporation (TSE:5352) might not have the largest market cap around , it saw significant share price movement during recent months on the TSE, rising to highs of JP¥3,748 and falling to the lows of JP¥2,963. 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 Krosaki Harima's current trading price of JP¥3,230 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 Krosaki Harima’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 Krosaki Harima

Is Krosaki Harima Still Cheap?

According to our valuation model, Krosaki Harima seems to be fairly priced at around 12% below our intrinsic value, which means if you buy Krosaki Harima today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth ¥3664.69, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Krosaki Harima’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 Krosaki Harima?

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. Though in the case of Krosaki Harima, it is expected to deliver a relatively unexciting earnings growth of 0.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? 5352’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 financial strength of the company. 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 5352, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Krosaki Harima at this point in time. While conducting our analysis, we found that Krosaki Harima has 1 warning sign and it would be unwise to ignore this.

If you are no longer interested in Krosaki Harima, 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.