Is Now An Opportune Moment To Examine MCNEX Co., Ltd (KRX:097520)?

MCNEX Co., Ltd (KRX:097520), might not be a large cap stock, but 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. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine MCNEX’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for MCNEX

What Is MCNEX Worth?

Good news, investors! MCNEX is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that MCNEX’s ratio of 7.11x is below its peer average of 11.66x, which indicates the stock is trading at a lower price compared to the Electronic industry. What’s more interesting is that, MCNEX’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 kind of growth will MCNEX 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. However, with a negative profit growth of -6.6% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for MCNEX. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although A097520 is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. We recommend you think about whether you want to increase your portfolio exposure to A097520, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on A097520 for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So while earnings quality is important, it's equally important to consider the risks facing MCNEX at this point in time. You'd be interested to know, that we found 1 warning sign for MCNEX and you'll want to know about it.

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

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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.