Is There Now An Opportunity In Anton Oilfield Services Group (HKG:3337)?
Anton Oilfield Services Group (SEHK:3337), an energy company based in China, saw a decent share price growth in the teens level on the SEHK over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s examine Anton Oilfield Services Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Anton Oilfield Services Group
Is Anton Oilfield Services Group still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Anton Oilfield Services Group’s ratio of 0.82x is trading slightly below its industry peers’ ratio of 1.24x, which means if you buy Anton Oilfield Services Group today, you’d be paying a relatively fair price for it. And if you believe Anton Oilfield Services Group should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Anton Oilfield Services Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Anton Oilfield Services Group generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. In Anton Oilfield Services Group’s case, its revenues over the next few years are expected to grow by 49.82%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger 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 3337’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 3337? 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 3337, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for 3337, which means it’s worth diving deeper into 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 Anton Oilfield Services Group. You can find everything you need to know about Anton Oilfield Services Group in the latest infographic research report. If you are no longer interested in Anton Oilfield Services Group, 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.
