Is It Time To Consider Buying ANJI Technology Co., Ltd. (TPE:6477)?

While ANJI Technology Co., Ltd. (TPE:6477) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the TSEC over the last few months, increasing to NT$72.60 at one point, and dropping to the lows of NT$56.00. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether ANJI Technology's current trading price of NT$58.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ANJI Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for ANJI Technology

Is ANJI Technology still cheap?

Good news, investors! ANJI Technology is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’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 20.27x is currently well-below the industry average of 26.79x, meaning that it is trading at a cheaper price relative to its peers. However, given that ANJI Technology’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will ANJI Technology generate?

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. However, with an expected decline of -2.5% in revenues over the next year, short term growth isn’t a driver for a buy decision for ANJI Technology. This certainty tips the risk-return scale towards higher risk.

What this means for you:

Are you a shareholder? Although 6477 is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to 6477, 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 6477 for some time, but hesitant on making the leap, I recommend you dig deeper 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.

If you'd like to know more about ANJI Technology as a business, it's important to be aware of any risks it's facing. For instance, we've identified 3 warning signs for ANJI Technology (1 is concerning) you should be familiar with.

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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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