At ₩19,000, Is LOT VACUUM Co., Ltd. (KOSDAQ:083310) Worth Looking At Closely?

LOT VACUUM Co., Ltd. (KOSDAQ:083310), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the KOSDAQ. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on LOT VACUUM’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for LOT VACUUM

What is LOT VACUUM worth?

The stock is currently trading at ₩19,000 on the share market, which means it is overvalued by 21% compared to my intrinsic value of ₩15733.43. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that LOT VACUUM’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will LOT VACUUM 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. 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 profit expected to more than double over the next couple of years, the future seems bright for LOT VACUUM. 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? A083310’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe A083310 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 an eye on A083310 for a while, 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 optimistic prospect is encouraging for A083310, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into LOT VACUUM, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for LOT VACUUM you should know about.

If you are no longer interested in LOT VACUUM, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

When trading LOT VACUUM or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.