Today we're going to take a look at the well-established Anhui Gujing Distillery Co., Ltd. (SZSE:000596). The company's stock saw a decent share price growth of 13% on the SZSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Let's examine Anhui Gujing Distillery's valuation and outlook in more detail to determine if there's still a bargain opportunity.
What's The Opportunity In Anhui Gujing Distillery?
The stock seems fairly valued at the moment according to our valuation model. It's trading around 19.26% above our intrinsic value, which means if you buy Anhui Gujing Distillery today, you'd be paying a relatively reasonable price for it. And if you believe the company's true value is CN¥188.04, there's only an insignificant downside when the price falls to its real value. In addition to this, Anhui Gujing Distillery has a low beta, which suggests its share price is less volatile than the wider market.
What does the future of Anhui Gujing Distillery look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Anhui Gujing Distillery's earnings over the next few years are expected to increase by 70%, 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? 000596's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. 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?
Are you a potential investor? If you've been keeping tabs on 000596, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Anhui Gujing Distillery, you'd also look into what risks it is currently facing. To that end, you should learn about the 2 warning signs we've spotted with Anhui Gujing Distillery (including 1 which makes us a bit uncomfortable).
If you are no longer interested in Anhui Gujing Distillery, 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.