Is Now An Opportune Moment To Examine Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA)?

While Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? 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.

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

Is Loma Negra Compañía Industrial Argentina Sociedad Anónima Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 19.4x is currently trading in-line with its industry peers’ ratio, which means if you buy Loma Negra Compañía Industrial Argentina Sociedad Anónima today, you’d be paying a relatively reasonable price for it. So, is there another chance to buy low in the future? 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 an opportunity to buy later on. 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?

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 Loma Negra Compañía Industrial Argentina Sociedad Anónima's case, its earnings over the next year are expected to double, indicating an incredibly 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? It seems like the market has already priced in LOMA’s positive outlook, with shares trading around industry price multiples. 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 LOMA? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on LOMA, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for LOMA, 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.

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. While conducting our analysis, we found that Loma Negra Compañía Industrial Argentina Sociedad Anónima has 2 warning signs and it would be unwise to ignore them.

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.