Should You Investigate Doosan Bobcat Inc. (KRX:241560) At ₩54,600?

Doosan Bobcat Inc. (KRX:241560), is not the largest company out there, but it saw a decent share price growth of 10% on the KOSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. 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. But what if there is still an opportunity to buy? Let’s examine Doosan Bobcat’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Doosan Bobcat

What's The Opportunity In Doosan Bobcat?

Great news for investors – Doosan Bobcat is still trading at a fairly cheap price according to our price multiple model, where we compare 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 5.64x is currently well-below the industry average of 15.26x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Doosan Bobcat’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.

What kind of growth will Doosan Bobcat 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. However, with a negative profit growth of -14% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Doosan Bobcat. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although A241560 is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to A241560, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on A241560 for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing Doosan Bobcat at this point in time. When we did our research, we found 2 warning signs for Doosan Bobcat (1 is a bit unpleasant!) that we believe deserve your full attention.

If you are no longer interested in Doosan Bobcat, 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