Should You Think About Buying Feng Tay Enterprises Co., Ltd. (TWSE:9910) Now?

While Feng Tay Enterprises Co., Ltd. (TWSE:9910) might not have the largest market cap around , it saw its share price hover around a small range of NT$157 to NT$171 over the last few weeks. But is this actually reflective of the share value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Feng Tay Enterprises’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Feng Tay Enterprises

Is Feng Tay Enterprises Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 30.87x is currently trading slightly above its industry peers’ ratio of 26.77x, which means if you buy Feng Tay Enterprises today, you’d be paying a relatively sensible price for it. And if you believe that Feng Tay Enterprises should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Furthermore, it seems like Feng Tay Enterprises’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s priced similarly to industry peers. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Feng Tay Enterprises 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. Feng Tay Enterprises' earnings over the next few years are expected to increase by 70%, 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 9910’s positive outlook, with shares trading around industry price multiples. 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 9910? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on 9910, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for 9910, 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.

If you want to dive deeper into Feng Tay Enterprises, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Feng Tay Enterprises you should know about.

If you are no longer interested in Feng Tay Enterprises, 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.