China Aircraft Leasing Group Holdings Limited (HKG:1848), which is in the trade distributors business, and is based in Hong Kong, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of HK$7.96 to HK$8.38. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at China Aircraft Leasing Group Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is China Aircraft Leasing Group Holdings still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.24% above my intrinsic value, which means if you buy China Aircraft Leasing Group Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is HK$7.90, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because China Aircraft Leasing Group Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from China Aircraft Leasing Group Holdings?
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. China Aircraft Leasing Group Holdings’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 1848’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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on 1848, 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 the company, 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 China Aircraft Leasing Group Holdings. You can find everything you need to know about China Aircraft Leasing Group Holdings in the latest infographic research report. If you are no longer interested in China Aircraft Leasing Group Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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