When Should You Buy ICD Co., Ltd. (KOSDAQ:040910)?

While ICD Co., Ltd. (KOSDAQ:040910) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the KOSDAQ over the last few months. Less-covered, small caps sees 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 ICD’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for ICD

Is ICD still cheap?

Good news, investors! ICD is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’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 6.12x is currently well-below the industry average of 21.16x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, ICD’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.

Can we expect growth from ICD?

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 relatively muted profit growth of 4.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for ICD, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since A040910 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on A040910 for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A040910. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment.

If you want to dive deeper into ICD, you'd also look into what risks it is currently facing. For example, ICD has 3 warning signs (and 1 which is potentially serious) we think you should know about.

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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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