Is It Too Late To Buy IXYS Corporation (IXYS)?
IXYS Corporation (NASDAQ:IXYS), a semiconductors and semiconductor equipment company based in United States, led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine IXYS’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for IXYS
What is IXYS worth?
According to my valuation model, the stock is currently overpriced by about 67%, trading at $24.4 compared to my intrinsic value of $14.65. This means that the opportunity to buy IXYS at a good price has disappeared! Furthermore, IXYS’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of IXYS 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. Though in the case of IXYS, it is expected to deliver a relatively unexciting top-line growth of 3.62% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for IXYS, at least in the near term.
What this means for you:
Are you a shareholder? IXYS’s future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe IXYS should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on IXYS for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors 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 IXYS. You can find everything you need to know about IXYS in the latest infographic research report. If you are no longer interested in IXYS, 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.
