Xinyi Glass Holdings Limited (HKG:868), might not be a large cap stock, but it saw a significant share price rise of 39% in the past couple of months on the SEHK. While good news for shareholders, the company has traded much higher in the past year. 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. However, what if the stock is still a bargain? Let's take a look at Xinyi Glass Holdings's outlook and value based on the most recent financial data to see if the opportunity still exists.
What's The Opportunity In Xinyi Glass Holdings?
According to our valuation model, Xinyi Glass Holdings seems to be fairly priced at around 8.6% below our intrinsic value, which means if you buy Xinyi Glass Holdings today, you'd be paying a fair price for it. And if you believe that the stock is really worth HK$9.39, then there's not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Xinyi Glass Holdings's beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Xinyi Glass Holdings?
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. 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. Xinyi Glass Holdings' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to 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 868'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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you've been keeping tabs on 868, 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 diving deeper into 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 Xinyi Glass Holdings, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Xinyi Glass Holdings has 2 warning signs and it would be unwise to ignore them.
If you are no longer interested in Xinyi Glass Holdings, 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.