Is There Now An Opportunity In LS ELECTRIC Co., Ltd. (KRX:010120)?

LS ELECTRIC Co., Ltd. (KRX:010120), is not the largest company out there, but it received a lot of attention from a substantial price increase on the KOSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine LS ELECTRIC’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for LS ELECTRIC

What's The Opportunity In LS ELECTRIC?

According to our valuation model, the stock is currently overvalued by about 23%, trading at ₩220,500 compared to our intrinsic value of ₩179824.50. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Given that LS ELECTRIC’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 kind of growth will LS ELECTRIC generate?

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. 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. LS ELECTRIC's earnings over the next few years are expected to increase by 41%, 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? A010120’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe A010120 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on A010120 for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for A010120, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about LS ELECTRIC as a business, it's important to be aware of any risks it's facing. For example, we've found that LS ELECTRIC has 2 warning signs (1 is concerning!) that deserve your attention before going any further with your analysis.

If you are no longer interested in LS ELECTRIC, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com