Asian Pay Television Trust (SGX:S7OU), a media company based in Singapore, saw significant share price volatility over the past couple of months on the SGX, rising to the highs of SGD0.59 and falling to the lows of SGD0.5. 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 Asian Pay Television Trust’s current trading price of SGD0.51 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 Asian Pay Television Trust’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 Asian Pay Television Trust
Is Asian Pay Television Trust still cheap?
According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Asian Pay Television Trust’s ratio of 20.08x is trading slightly above its industry peers’ ratio of 16.58x, which means if you buy Asian Pay Television Trust today, you’d be paying a relatively fair price for it. And if you believe Asian Pay Television Trust should be trading in this range, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Asian Pay Television Trust’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Asian Pay Television Trust 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. Asian Pay Television Trust’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to 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 S7OU’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 financial strength of the company. Have these factors changed since the last time you looked at S7OU? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on S7OU, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for S7OU, 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 Asian Pay Television Trust. You can find everything you need to know about Asian Pay Television Trust in the latest infographic research report. If you are no longer interested in Asian Pay Television Trust, 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.