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Yangtze Optical Fibre And Cable Joint Stock Limited Company (HKG:6869), which is in the communications business, and is based in China, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$22 at one point, and dropping to the lows of HK$14.82. 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 Yangtze Optical Fibre And Cable Limited's current trading price of HK$15 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Yangtze Optical Fibre And Cable Limited’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Yangtze Optical Fibre And Cable Limited still cheap?
Good news, investors! Yangtze Optical Fibre And Cable Limited is still a bargain right now. My valuation model shows that the intrinsic value for the stock is HK$19.08, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because Yangtze Optical Fibre And Cable Limited’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 Yangtze Optical Fibre And Cable Limited?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Yangtze Optical Fibre And Cable Limited, at least in the near future.
What this means for you:
Are you a shareholder? Although 6869 is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to 6869, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on 6869 for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Yangtze Optical Fibre And Cable Limited. You can find everything you need to know about Yangtze Optical Fibre And Cable Limited in the latest infographic research report. If you are no longer interested in Yangtze Optical Fibre And Cable Limited, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.