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Korean Bargain Buy: Korea Electric Power Corp (NYSE:KEP)
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We look at Korea Electric Power Corp. (NYSE:KEP) a company in the Electric Utilities industry which operates in the Korean market, to assess if it provides value for investors considering buying or selling it. Currently Korea Electric Power Corp. is trading at $19.10 after moving down -2.75% in the previous day of trading. [Trend Analysis]
KEP is trading with a trailing 12 month P/E multiple of 9.32 and an estimated forward P/E multiple of 0.00. The stock has an estimated 5 year annual growth of 25.19% and a PEG multiple of 0.37.
Rather than the usual Price to Earnings (P/E) multiple method, we use a slightly different method to assess if Korea Electric Power Corp. is potentially a value buy for investors, the PEG ratio (P/E to growth). This PEG multiple takes into account the expected long term growth in earnings of the company rather than merely the growth for one earnings period ahead as forward P/E does.
That is to say, P/E simply doesn’t account for the long term prospects of KEP. As a rule of thumb, a stock with a PEG of between 0 and 1 is usually considered to be underpriced, between 1 and 2 to be at fair value and over 2 to be overpriced. Based on the PEG ratio of KEP being 0.37, we consider Korea Electric Power Corp. to likely be underpriced.
This analysis means that value buyers who do not currently hold Korea Electric Power Corp. (NYSE:KEP) should consider buying and investors currently holding the stock should continue holding.
The mean analyst 12 month target price for Korea Electric Power Corp. (NYSE:KEP) is currently $26.80 or 40.31% above the current price. Additionally, the stock has been as high as $23.12 and as low as $16.81 in the last 52 weeks. Analysts are estimating that KEP will report earnings per share of $0.00 next quarter.