When Should You Buy Hunesion Co.,Ltd (KOSDAQ:290270)?

Hunesion Co.,Ltd (KOSDAQ:290270), is not the largest company out there, but it received a lot of attention from a substantial price movement on the KOSDAQ over the last few months, increasing to ₩5,820 at one point, and dropping to the lows of ₩5,160. 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 HunesionLtd's current trading price of ₩5,400 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 HunesionLtd’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 HunesionLtd

Is HunesionLtd still cheap?

According to my valuation model, HunesionLtd seems to be fairly priced at around 13% below my intrinsic value, which means if you buy HunesionLtd today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₩6219.34, 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 HunesionLtd’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.

What kind of growth will HunesionLtd generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 revenues expected to grow by 53% over the next couple of years, the future seems bright for HunesionLtd. If the level of expenses is able to be maintained, 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? It seems like the market has already priced in A290270’s positive outlook, 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 an eye on A290270, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Be aware that HunesionLtd is showing 2 warning signs in our investment analysis and 1 of those is significant...

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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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