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ASM Pacific Technology Limited (HKG:522), which is in the semiconductor business, and is based in Hong Kong, saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at ASM Pacific Technology’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for ASM Pacific Technology
What’s the opportunity in ASM Pacific Technology?
Great news for investors – ASM Pacific Technology is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$103.8, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that ASM Pacific Technology’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from ASM Pacific Technology?
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. With profit expected to grow by 39% over the next couple of years, the future seems bright for ASM Pacific Technology. 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 522 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on 522 for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 522. 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.