At ₩29,800, Is Hyundai Engineering & Construction Co.,Ltd. (KRX:000720) Worth Looking At Closely?

Hyundai Engineering & Construction Co.,Ltd. (KRX:000720), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the KOSE over the last few months, increasing to ₩34,450 at one point, and dropping to the lows of ₩29,650. 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 Hyundai Engineering & ConstructionLtd's current trading price of ₩29,800 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 Hyundai Engineering & ConstructionLtd’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Hyundai Engineering & ConstructionLtd

What Is Hyundai Engineering & ConstructionLtd Worth?

Great news for investors – Hyundai Engineering & ConstructionLtd is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Hyundai Engineering & ConstructionLtd’s ratio of 6.19x is below its peer average of 7.82x, which indicates the stock is trading at a lower price compared to the Construction industry. However, given that Hyundai Engineering & ConstructionLtd’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.

What does the future of Hyundai Engineering & ConstructionLtd look like?

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. Though in the case of Hyundai Engineering & ConstructionLtd, it is expected to deliver a relatively unexciting earnings growth of 8.5%, 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? Even though growth is relatively muted, since A000720 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on A000720 for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A000720. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 2 warning signs for Hyundai Engineering & ConstructionLtd (1 can't be ignored!) that we believe deserve your full attention.

If you are no longer interested in Hyundai Engineering & ConstructionLtd, 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.