Should You Investigate Samsung Electro-Mechanics Co., Ltd. (KRX:009150) At ₩164,000?

Samsung Electro-Mechanics Co., Ltd. (KRX:009150) received a lot of attention from a substantial price increase on the KOSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Samsung Electro-Mechanics’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Samsung Electro-Mechanics

What is Samsung Electro-Mechanics worth?

According to my valuation model, Samsung Electro-Mechanics seems to be fairly priced at around 7.01% above my intrinsic value, which means if you buy Samsung Electro-Mechanics today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is ₩153253.84, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Samsung Electro-Mechanics’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 Samsung Electro-Mechanics look like?

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. 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. Samsung Electro-Mechanics' earnings over the next few years are expected to increase by 39%, 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? It seems like the market has already priced in A009150’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 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 A009150, 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.

Diving deeper into the forecasts for Samsung Electro-Mechanics mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

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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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