Yahoo Finance At US$21.11, Is It Time To Buy Hollysys Automation Technologies Ltd (NASDAQ:HOLI)?
Hollysys Automation Technologies Ltd (NASDAQ:HOLI), a electronic company based in China, saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $25.42 and falling to the lows of $20.75. 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 Hollysys Automation Technologies’s current trading price of $21.11 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 Hollysys Automation Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Hollysys Automation Technologies
What is Hollysys Automation Technologies worth?
According to my valuation model, Hollysys Automation Technologies seems to be fairly priced at around 11.83% below my intrinsic value, which means if you buy Hollysys Automation Technologies today, you’d be paying a fair price for it. And if you believe that the stock is really worth $23.94, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Hollysys Automation Technologies’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Hollysys Automation Technologies look like?
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. 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. Hollysys Automation Technologies’s earnings over the next few years are expected to increase by 77.20%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in HOLI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on HOLI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining 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 Hollysys Automation Technologies. You can find everything you need to know about Hollysys Automation Technologies in the latest infographic research report. If you are no longer interested in Hollysys Automation Technologies, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
