Is There Now An Opportunity In TSC Auto ID Technology Co., Ltd. (GTSM:3611)?

February 22, 2021

TSC Auto ID Technology Co., Ltd. (GTSM:3611), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the GTSM over the last few months, increasing to NT$208 at one point, and dropping to the lows of NT$189. 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 TSC Auto ID Technology's current trading price of NT$199 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 TSC Auto ID 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 TSC Auto ID Technology

Is TSC Auto ID Technology still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.6% below my intrinsic value, which means if you buy TSC Auto ID Technology today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth NT$203.83, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, TSC Auto ID Technology’s low beta implies that the stock is less volatile than the wider market.

What does the future of TSC Auto ID Technology look like?

earnings-and-revenue-growth — GTSM:3611 Earnings and Revenue Growth February 23rd 2021

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. In the upcoming year, TSC Auto ID Technology's earnings are expected to increase by 21%, 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? 3611’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 3611, now may not be the most advantageous 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 TSC Auto ID Technology has 1 warning sign and it would be unwise to ignore it.

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Valuation is complex, but we're here to simplify it.

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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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