At NT$23.15, Is Tai Tung Communication Co., Ltd. (TPE:8011) Worth Looking At Closely?

While Tai Tung Communication Co., Ltd. (TPE:8011) might not be the most widely known stock at the moment, it led the TSEC gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Tai Tung Communication’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Tai Tung Communication

What is Tai Tung Communication worth?

Good news, investors! Tai Tung Communication is still a bargain right now. According to my valuation, the intrinsic value for the stock is NT$30.70, but it is currently trading at NT$23.15 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Tai Tung Communication’s share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Tai Tung Communication?

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 a relatively muted revenue growth of 8.7% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Tai Tung Communication.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since 8011 is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on 8011 for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 8011. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've found that Tai Tung Communication has 3 warning signs (1 doesn't sit too well with us!) that deserve your attention before going any further with your analysis.

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

If you’re looking to trade Tai Tung Communication, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade 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.