Is Now An Opportune Moment To Examine Nexteer Automotive Group Limited (HKG:1316)?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Nexteer Automotive Group Limited (HKG:1316), which is in the auto components business, and is based in United States, saw significant share price movement during recent months on the SEHK, rising to highs of HK$12.78 and falling to the lows of HK$9.06. 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 Nexteer Automotive Group's current trading price of HK$9.24 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 Nexteer Automotive Group’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 Nexteer Automotive Group
What is Nexteer Automotive Group worth?
Great news for investors – Nexteer Automotive Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$12.58, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Nexteer Automotive Group’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
Can we expect growth from Nexteer Automotive Group?
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. However, with a relatively muted profit growth of 7.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Nexteer Automotive Group, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since 1316 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on 1316 for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 1316. 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 investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Nexteer Automotive Group. You can find everything you need to know about Nexteer Automotive Group in the latest infographic research report. If you are no longer interested in Nexteer Automotive Group, 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 editorial-team@simplywallst.com. 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.
