Should You Investigate Pan Ocean Co., Ltd. (KRX:028670) At ₩4,625?

While Pan Ocean Co., Ltd. (KRX:028670) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the KOSE over the last few months. With many analysts covering the mid-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 Pan Ocean’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Pan Ocean

Is Pan Ocean still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.59% above my intrinsic value, which means if you buy Pan Ocean today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth ₩4181.96, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Pan Ocean’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.

Can we expect growth from Pan Ocean?

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. 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 profit expected to grow by 68% over the next couple of years, the future seems bright for Pan Ocean. 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 A028670’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 A028670, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Pan Ocean has 1 warning sign and it would be unwise to ignore it.

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

When trading Pan Ocean or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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