Is It Too Late To Buy Consun Pharmaceutical Group Limited (HKG:1681)?
Consun Pharmaceutical Group Limited (SEHK:1681), a pharmaceuticals company based in China, saw a decent share price growth in the teens level on the SEHK over the last few months. As a 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 Consun Pharmaceutical Group’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for Consun Pharmaceutical Group
What’s the opportunity in Consun Pharmaceutical Group?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19.49% below my intrinsic value, which means if you buy Consun Pharmaceutical Group today, you’d be paying a reasonable price for it. And if you believe the company’s true value is HK$11.39, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, it seems like Consun Pharmaceutical Group’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Consun Pharmaceutical Group 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. With profit expected to grow by 59.42% over the next couple of years, the future seems bright for Consun Pharmaceutical Group. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? 1681’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 financial strength of the company. 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 an eye on 1681, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Consun Pharmaceutical Group. You can find everything you need to know about Consun Pharmaceutical Group in the latest infographic research report. If you are no longer interested in Consun Pharmaceutical Group, 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.
