When Should You Buy HANMI Semiconductor Co., Ltd. (KRX:042700)?

HANMI Semiconductor Co., Ltd. (KRX:042700), might not be a large cap stock, but it led the KOSE gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s take a look at HANMI Semiconductor’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for HANMI Semiconductor

What is HANMI Semiconductor worth?

Great news for investors – HANMI Semiconductor is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is ₩23248.41, but it is currently trading at ₩18,250 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, HANMI Semiconductor’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.

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. HANMI Semiconductor's earnings over the next few years are expected to increase by 54%, 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 A042700 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 A042700 for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy A042700. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you want to dive deeper into HANMI Semiconductor, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for HANMI Semiconductor (of which 1 shouldn't be ignored!) 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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