Is Now An Opportune Moment To Examine HANMI Semiconductor Co., Ltd. (KRX:042700)?

HANMI Semiconductor Co., Ltd. (KRX:042700), is not the largest company out there, but it received a lot of attention from a substantial price increase on the KOSE over the last few months. As a small cap stock, which tends to lack high analyst coverage, 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? Let’s examine HANMI Semiconductor’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for HANMI Semiconductor

What is HANMI Semiconductor worth?

According to my valuation model, HANMI Semiconductor seems to be fairly priced at around 1.0% below my intrinsic value, which means if you buy HANMI Semiconductor today, you’d be paying a fair price for it. And if you believe the company’s true value is ₩33191.54, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because HANMI Semiconductor’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of HANMI Semiconductor look like?

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. With profit expected to more than double over the next couple of years, the future seems bright for HANMI Semiconductor. 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? A042700’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on A042700, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you'd like to know more about HANMI Semiconductor as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for HANMI Semiconductor and you'll want to know about it.

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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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