Is It Too Late To Consider Buying Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA)?

Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA), might not be a large cap stock, but it saw a significant share price rise of 46% in the past couple of months on the NYSE. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Loma Negra Compañía Industrial Argentina Sociedad Anónima’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

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Is Loma Negra Compañía Industrial Argentina Sociedad Anónima Still Cheap?

According to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average, the stock currently looks expensive. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Loma Negra Compañía Industrial Argentina Sociedad Anónima’s ratio of 34.61x is above its peer average of 23.61x, which suggests the stock is trading at a higher price compared to the Basic Materials industry. In addition to this, it seems like Loma Negra Compañía Industrial Argentina Sociedad Anónima’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, 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.

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

What does the future of Loma Negra Compañía Industrial Argentina Sociedad Anónima 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. 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. Loma Negra Compañía Industrial Argentina Sociedad Anónima's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? LOMA’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe LOMA should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on LOMA for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for LOMA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Loma Negra Compañía Industrial Argentina Sociedad Anónima, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for Loma Negra Compañía Industrial Argentina Sociedad Anónima you should know about.

If you are no longer interested in Loma Negra Compañía Industrial Argentina Sociedad Anónima, 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.