In This Article:
Today we’re going to take a look at the well-established Great Wall Motor Company Limited (SEHK:2333). The company’s stock received a lot of attention from a substantial price movement on the SEHK in the over the last few months, increasing to HK$10.06 at one point, and dropping to the lows of HK$7.87. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Great Wall Motor’s current trading price of HK$7.87 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Great Wall Motor’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Great Wall Motor
What’s the opportunity in Great Wall Motor?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 8% above my intrinsic value, which means if you buy Great Wall Motor today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is HK$7.3, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Great Wall Motor’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Great Wall Motor look like?
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. Great Wall Motor’s earnings over the next few years are expected to increase by 84.40%, indicating a highly optimistic future ahead. This should lead to more robust 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 2333’s positive outlook, with shares trading around its fair value. 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 the stock? Will you have enough conviction to buy should the price fluctuates below the true value?