Is There Now An Opportunity In LG Innotek Co., Ltd. (KRX:011070)?

While LG Innotek Co., Ltd. (KRX:011070) might not have the largest market cap around , it received a lot of attention from a substantial price increase on the KOSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on LG Innotek’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for LG Innotek

What's The Opportunity In LG Innotek?

According to our valuation model, LG Innotek seems to be fairly priced at around 1.4% below our intrinsic value, which means if you buy LG Innotek today, you’d be paying a reasonable price for it. And if you believe the company’s true value is ₩252575.76, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, LG Innotek’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from LG Innotek?

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 grow by 40% over the next couple of years, the future seems bright for LG Innotek. 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? A011070’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 financial strength of the company. 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 A011070, 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.

If you'd like to know more about LG Innotek as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for LG Innotek and you'll want to know about these.

If you are no longer interested in LG Innotek, 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.