Is There Now An Opportunity In HD Hyundai Construction Equipment Co., LTD. (KRX:267270)?

HD Hyundai Construction Equipment Co., LTD. (KRX:267270), might not be a large cap stock, but it saw significant share price movement during recent months on the KOSE, rising to highs of ₩68,500 and falling to the lows of ₩46,600. 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 HD Hyundai Construction Equipment's current trading price of ₩49,650 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 HD Hyundai Construction Equipment’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for HD Hyundai Construction Equipment

Is HD Hyundai Construction Equipment Still Cheap?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 11.38x is currently trading slightly below its industry peers’ ratio of 12.09x, which means if you buy HD Hyundai Construction Equipment today, you’d be paying a reasonable price for it. And if you believe HD Hyundai Construction Equipment should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since HD Hyundai Construction Equipment’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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 HD Hyundai Construction Equipment generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. HD Hyundai Construction Equipment'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? A267270’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 A267270? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on A267270, 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 A267270, 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.

If you want to dive deeper into HD Hyundai Construction Equipment, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 3 warning signs with HD Hyundai Construction Equipment, and understanding these should be part of your investment process.

If you are no longer interested in HD Hyundai Construction Equipment, 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.