Is There Now An Opportunity In Malaysian Pacific Industries Berhad (KLSE:MPI)?
While Malaysian Pacific Industries Berhad (KLSE:MPI) might not have the largest market cap around , it saw a decent share price growth of 15% on the KLSE over the last few months. The company's trading levels have approached the yearly peak, following the recent bounce in the share price. 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 Malaysian Pacific Industries Berhad’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Malaysian Pacific Industries Berhad
Is Malaysian Pacific Industries Berhad Still Cheap?
Malaysian Pacific Industries Berhad appears to be overvalued by 22% at the moment, based on our discounted cash flow valuation. The stock is currently priced at RM30.02 on the market compared to our intrinsic value of MYR24.61. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Malaysian Pacific Industries Berhad’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 Pacific Industries Berhad 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. 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. With profit expected to more than double over the next couple of years, the future seems bright for Malaysian Pacific Industries Berhad. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? MPI’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MPI should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on MPI for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for MPI, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into Malaysian Pacific Industries Berhad, you'd also look into what risks it is currently facing. While conducting our analysis, we found that Malaysian Pacific Industries Berhad has 1 warning sign and it would be unwise to ignore this.
If you are no longer interested in Malaysian Pacific Industries 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.
