Why LG Hausys, Ltd. (KRX:108670) Could Be Worth Watching

While LG Hausys, Ltd. (KRX:108670) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the KOSE over the last few months. 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 LG Hausys’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for LG Hausys

What is LG Hausys worth?

The stock is currently trading at ₩96,800 on the share market, which means it is overvalued by 39% compared to my intrinsic value of ₩69703.47. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since LG Hausys’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

What does the future of LG Hausys look like?

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. However, with a relatively muted revenue growth of 9.3% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for LG Hausys, at least in the short term.

What this means for you:

Are you a shareholder? A108670’s future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe A108670 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 tabs on A108670 for some time, 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 means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for LG Hausys (1 shouldn't be ignored!) and we strongly recommend you look at them before investing.

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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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