Should You Think About Buying Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) Now?

While Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$13.27 at one point, and dropping to the lows of US$10.41. 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 Loma Negra Compañía Industrial Argentina Sociedad Anónima's current trading price of US$10.55 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 Loma Negra Compañía Industrial Argentina Sociedad Anónima’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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 18.37x is currently trading slightly below its industry peers’ ratio of 19.21x, which means if you buy Loma Negra Compañía Industrial Argentina Sociedad Anónima today, you’d be paying a reasonable price for it. And if you believe that Loma Negra Compañía Industrial Argentina Sociedad Anónima should be trading at this level in the long run, then there’s not much of an upside to gain over and above other industry peers. 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. 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. With profit expected to grow by 79% 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? LOMA’s optimistic future growth appears to have been factored into the current share price, 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 positive outlook 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.

Since timing is quite important when it comes to individual stock picking, it's worth taking a look at what those latest analysts forecasts are. So feel free to check out our free graph representing analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.