Should You Investigate Daewoo Engineering & Construction Co., Ltd. (KRX:047040) At ₩3,545?

Daewoo Engineering & Construction Co., Ltd. (KRX:047040), might not be a large cap stock, but it saw a decent share price growth of 19% 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 stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Daewoo Engineering & Construction’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Our free stock report includes 3 warning signs investors should be aware of before investing in Daewoo Engineering & Construction. Read for free now.

Is Daewoo Engineering & Construction Still Cheap?

Good news, investors! Daewoo Engineering & Construction is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 6.22x is currently well-below the industry average of 7.95x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Daewoo Engineering & Construction’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

View our latest analysis for Daewoo Engineering & Construction

What kind of growth will Daewoo Engineering & Construction 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. 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. Daewoo Engineering & Construction's earnings over the next few years are expected to increase by 76%, 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 A047040 is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic 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 price multiple.

Are you a potential investor? If you’ve been keeping an eye on A047040 for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A047040. 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 investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 3 warning signs for Daewoo Engineering & Construction you should be mindful of and 2 of them are significant.

If you are no longer interested in Daewoo Engineering & Construction, 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.