Is It Time To Consider Buying Silicon Works Co., Ltd. (KOSDAQ:108320)?

Silicon Works Co., Ltd. (KOSDAQ:108320), might not be a large cap stock, but it saw significant share price movement during recent months on the KOSDAQ, rising to highs of ₩51,200 and falling to the lows of ₩43,350. 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 Silicon Works' current trading price of ₩47,000 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 Silicon Works’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Silicon Works

What's the opportunity in Silicon Works?

Great news for investors – Silicon Works is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is ₩78188.68, but it is currently trading at ₩47,000 on the share market, meaning that there is still an opportunity to buy now. However, given that Silicon Works’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.

Can we expect growth from Silicon Works?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Silicon Works' earnings over the next few years are expected to increase by 90%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since A108320 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on A108320 for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A108320. 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 buy.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 1 warning sign for Silicon Works 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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