Should You Investigate UNISEM Co., Ltd. (KOSDAQ:036200) At ₩11,750?

UNISEM Co., Ltd. (KOSDAQ:036200), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the KOSDAQ over the last few months. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at UNISEM’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for UNISEM

What is UNISEM worth?

According to my valuation model, UNISEM seems to be fairly priced at around 12% below my intrinsic value, which means if you buy UNISEM today, you’d be paying a fair price for it. And if you believe that the stock is really worth ₩13323.66, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since UNISEM’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 does the future of UNISEM 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. With revenues expected to grow by a double-digit 17% over the next couple of years, the outlook is positive for UNISEM. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? A036200’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on A036200, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, 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 UNISEM, you'd also look into what risks it is currently facing. For example - UNISEM has 1 warning sign we think you should be aware of.

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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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