Should You Investigate Posco International Corporation (KRX:047050) At ₩21,000?

Posco International Corporation (KRX:047050), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the KOSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Posco International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Posco International

Is Posco International still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.11% above my intrinsic value, which means if you buy Posco International today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ₩17931.09, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Posco International’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Posco International 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. With profit expected to grow by 43% over the next couple of years, the future seems bright for Posco International. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? A047050’s optimistic 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on A047050, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which 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.

If you'd like to know more about Posco International as a business, it's important to be aware of any risks it's facing. For example - Posco International has 1 warning sign we think you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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