At NT$42.25, Is It Time To Put Nanya Technology Corporation (TWSE:2408) On Your Watch List?

Nanya Technology Corporation (TWSE:2408), is not the largest company out there, but it received a lot of attention from a substantial price increase on the TWSE over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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, could the stock still be trading at a relatively cheap price? Let’s take a look at Nanya Technology’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Nanya Technology

What's The Opportunity In Nanya Technology?

According to our valuation model, Nanya Technology seems to be fairly priced at around 6.52% above our intrinsic value, which means if you buy Nanya Technology today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is NT$39.67, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Nanya 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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

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What does the future of Nanya Technology 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. However, with a relatively muted profit growth of 8.7% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Nanya Technology, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 2408’s future 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 2408, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. In terms of investment risks, we've identified 1 warning sign with Nanya Technology, and understanding it should be part of your investment process.

If you are no longer interested in Nanya Technology, 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.