Why TLB Co., Ltd (KOSDAQ:356860) Could Be Worth Watching

TLB Co., Ltd (KOSDAQ:356860), might not be a large cap stock, but it saw a significant share price rise of 111% in the past couple of months on the KOSDAQ. While good news for shareholders, the company has traded much higher in the past year. 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 TLB’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Is TLB Still Cheap?

The stock is currently trading at ₩46,500 on the share market, which means it is overvalued by 25% compared to our intrinsic value of ₩37263.26. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that TLB’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.

View our latest analysis for TLB

What kind of growth will TLB 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. TLB's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in A356860’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe A356860 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on A356860 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for A356860, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about TLB as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for TLB you should be aware of.

If you are no longer interested in TLB, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.