Is There Now An Opportunity In JA Solar Holdings Co Ltd (undefined:JASO)?
JA Solar Holdings Co Ltd (NASDAQ:JASO), a semiconductors and semiconductor equipment company based in China, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $8.21 and falling to the lows of $6.87. 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 JA Solar Holdings’s current trading price of $7.32 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at JA Solar Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for JA Solar Holdings
What is JA Solar Holdings worth?
According to my valuation model, JA Solar Holdings seems to be fairly priced at around 11% above my intrinsic value, which means if you buy JA Solar Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $6.61, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because JA Solar 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 JA Solar 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. 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. Though in the case of JA Solar Holdings, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? JA Solar Holdings seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on JA Solar Holdings for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on JA Solar Holdings should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on JA Solar Holdings. You can find everything you need to know about JA Solar Holdings in the latest infographic research report. If you are no longer interested in JA Solar Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
