Is There Now An Opportunity In LOT VACUUM Co., Ltd. (KOSDAQ:083310)?

While LOT VACUUM Co., Ltd. (KOSDAQ:083310) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the KOSDAQ over the last few months, increasing to ₩19,150 at one point, and dropping to the lows of ₩15,800. 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 LOT VACUUM's current trading price of ₩16,900 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 LOT VACUUM’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for LOT VACUUM

Is LOT VACUUM still cheap?

LOT VACUUM appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that LOT VACUUM’s ratio of 66.69x is above its peer average of 24.46x, which suggests the stock is trading at a higher price compared to the Semiconductor industry. But, is there another opportunity to buy low in the future? Since LOT VACUUM’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.

Can we expect growth from LOT VACUUM?

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. LOT VACUUM'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? It seems like the market has well and truly priced in A083310’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe A083310 should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 A083310 for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more 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'd like to know more about LOT VACUUM as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that LOT VACUUM has 2 warning signs and it would be unwise to ignore them.

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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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