Is Malaysian Genomics Resource Centre Berhad (KLSE:MGRC) Potentially Undervalued?
Malaysian Genomics Resource Centre Berhad (KLSE:MGRC), is not the largest company out there, but it saw a decent share price growth in the teens level on the KLSE over the last few months. 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? Today I will analyse the most recent data on Malaysian Genomics Resource Centre Berhad’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Malaysian Genomics Resource Centre Berhad
What Is Malaysian Genomics Resource Centre Berhad Worth?
Great news for investors – Malaysian Genomics Resource Centre Berhad is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Malaysian Genomics Resource Centre Berhad’s ratio of 13.16x is below its peer average of 29.51x, which indicates the stock is trading at a lower price compared to the Life Sciences industry. What’s more interesting is that, Malaysian Genomics Resource Centre Berhad’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 kind of growth will Malaysian Genomics Resource Centre Berhad generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Malaysian Genomics Resource Centre Berhad'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? Since MGRC is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on MGRC for a while, now might be the time to make a leap. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MGRC. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.
If you want to dive deeper into Malaysian Genomics Resource Centre Berhad, you'd also look into what risks it is currently facing. For instance, we've identified 4 warning signs for Malaysian Genomics Resource Centre Berhad (2 are significant) you should be familiar with.
If you are no longer interested in Malaysian Genomics Resource Centre Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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