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Loma Negra Compañía Industrial Argentina Sociedad Anónima (NYSE:LOMA), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$6.29 and falling to the lows of US$5.03. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Loma Negra Compañía Industrial Argentina Sociedad Anónima's current trading price of US$5.29 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 Loma Negra Compañía Industrial Argentina Sociedad Anónima’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Loma Negra Compañía Industrial Argentina Sociedad Anónima worth?
Good news, investors! Loma Negra Compañía Industrial Argentina Sociedad Anónima is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’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 14.34x is currently well-below the industry average of 24.14x, 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?
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. With profit expected to more than double 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 accumulate more of your holdings in the stock. With an optimistic 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 financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on LOMA for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LOMA. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.
If you'd like to know more about Loma Negra Compañía Industrial Argentina Sociedad Anónima as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Loma Negra Compañía Industrial Argentina Sociedad Anónima, and understanding this should be part of your investment process.
If you are no longer interested in Loma Negra Compañía Industrial Argentina Sociedad Anónima, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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.
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