Why Hyosung Advanced Materials Corporation (KRX:298050) Could Be Worth Watching

While Hyosung Advanced Materials Corporation (KRX:298050) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the KOSE. As a 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? Today I will analyse the most recent data on Hyosung Advanced Materials’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Hyosung Advanced Materials

What's the opportunity in Hyosung Advanced Materials?

According to my valuation model, the stock is currently overvalued by about 21%, trading at ₩217,000 compared to my intrinsic value of ₩179153.77. This means that the opportunity to buy Hyosung Advanced Materials at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Hyosung Advanced Materials’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 Hyosung Advanced Materials 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. In Hyosung Advanced Materials' case, its revenues over the next few years are expected to grow by 39%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in A298050’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe A298050 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 A298050 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 is encouraging for A298050, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Hyosung Advanced Materials as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Hyosung Advanced Materials, and understanding it should be part of your investment process.

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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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