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Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The company is inching closer to its yearly highs following the recent share price climb. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here 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.
View our latest analysis for Loma Negra Compañía Industrial Argentina Sociedad Anónima
What's The Opportunity In Loma Negra Compañía Industrial Argentina Sociedad Anónima?
Great news for investors – Loma Negra Compañía Industrial Argentina Sociedad Anónima is still trading at a fairly cheap price 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 14.35x is currently well-below the industry average of 21.76x, meaning that it is trading at a cheaper price relative to its peers. However, 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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Loma Negra Compañía Industrial Argentina Sociedad Anónima?
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 89% 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? Since LOMA is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive 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 capital structure to consider, which could explain the current price multiple.