Nam Hyang Kim, Senior Analyst at Arete Research Services LLP, says Samsung Electronic Co Ltd (KRX:005930) is a value stock with various growth stories. He says the stock has been punished this year by shareholders.
“On a relative basis, it is not that bad compared to its peers, but the stock is trading below one-time forward book value,” Kim says. “Samsung has barely traded below one-time forward book value since 2000, so this is a really low valuation for the company.”
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Kim says Samsung is a very strong cash generator. He expects their net cash next year to be over $60 billion, which is approximately 40% of current market cap.
“Besides, people are not aware that Samsung is the number one earnings generator in its semiconductor business — more than Intel (NASDAQ:INTC) — this year, but they get no credit on this,” Kim says. “We also like that they are number one in many important growing sectors.”
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