Should You Investigate Iljin Electric Co.,Ltd (KRX:103590) At ₩21,550?

While Iljin Electric Co.,Ltd (KRX:103590) might not have the largest market cap around , it saw significant share price movement during recent months on the KOSE, rising to highs of ₩29,400 and falling to the lows of ₩19,850. 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 Iljin ElectricLtd's current trading price of ₩21,550 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 Iljin ElectricLtd’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 Iljin ElectricLtd

Is Iljin ElectricLtd Still Cheap?

The share price seems sensible at the moment 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 Iljin ElectricLtd’s ratio of 28.43x is trading slightly above its industry peers’ ratio of 23.82x, which means if you buy Iljin ElectricLtd today, you’d be paying a relatively reasonable price for it. And if you believe that Iljin ElectricLtd should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. So, is there another chance to buy low in the future? Given that Iljin ElectricLtd’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 kind of growth will Iljin ElectricLtd generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Iljin ElectricLtd's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? A103590’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at A103590? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on A103590, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for A103590, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Iljin ElectricLtd has 2 warning signs and it would be unwise to ignore them.

If you are no longer interested in Iljin ElectricLtd, 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