At US$6.62, Is It Time To Put Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) On Your Watch List?

By
Simply Wall St
Published
July 02, 2021
NYSE:LOMA
Source: Shutterstock

Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today I will analyse the most recent data on Loma Negra Compañía Industrial Argentina Sociedad Anónima’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Loma Negra Compañía Industrial Argentina Sociedad Anónima

What is Loma Negra Compañía Industrial Argentina Sociedad Anónima worth?

Good news, investors! Loma Negra Compañía Industrial Argentina Sociedad Anónima 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. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Loma Negra Compañía Industrial Argentina Sociedad Anónima’s ratio of 9.62x is below its peer average of 23.32x, which indicates the stock is trading at a lower price compared to the Basic Materials industry. However, given that Loma Negra Compañía Industrial Argentina Sociedad Anónima’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 Loma Negra Compañía Industrial Argentina Sociedad Anónima generate?

earnings-and-revenue-growth
NYSE:LOMA Earnings and Revenue Growth July 2nd 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. With profit expected to more than double over the next couple of years, the future seems bright for Loma Negra Compañía Industrial Argentina Sociedad Anónima. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since LOMA is currently below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on LOMA for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LOMA. 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 investment decision.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - Loma Negra Compañía Industrial Argentina Sociedad Anónima has 1 warning sign we think you should be aware of.

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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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