Is INNOX Advanced Materials Co.,Ltd. (KOSDAQ:272290) Potentially Undervalued?

INNOX Advanced Materials Co.,Ltd. (KOSDAQ:272290), is not the largest company out there, but it saw significant share price movement during recent months on the KOSDAQ, rising to highs of ₩54,300 and falling to the lows of ₩43,800. 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 INNOX Advanced MaterialsLtd's current trading price of ₩45,000 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 INNOX Advanced MaterialsLtd’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for INNOX Advanced MaterialsLtd

What's the opportunity in INNOX Advanced MaterialsLtd?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.3% below my intrinsic value, which means if you buy INNOX Advanced MaterialsLtd today, you’d be paying a fair price for it. And if you believe that the stock is really worth ₩48019.46, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that INNOX Advanced MaterialsLtd’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from INNOX Advanced MaterialsLtd?

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 grow by 77% over the next couple of years, the future seems bright for INNOX Advanced MaterialsLtd. 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? A272290’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on A272290, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Every company has risks, and we've spotted 1 warning sign for INNOX Advanced MaterialsLtd 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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