Sinosoft Technology Group Limited (SEHK:1297), a software company based in China, received a lot of attention from a substantial price increase 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, what if the stock is still a bargain? Let’s take a look at Sinosoft Technology Group’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Sinosoft Technology Group
What is Sinosoft Technology Group worth?
According to my valuation model, Sinosoft Technology Group seems to be fairly priced at around 9% above my intrinsic value, which means if you buy Sinosoft Technology Group today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth HK$3.37, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Sinosoft Technology Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What does the future of Sinosoft Technology Group look like?
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. Sinosoft Technology Group’s earnings over the next few years are expected to increase by 58.20%, indicating a highly optimistic future ahead. This should lead to more 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 1297’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 tabs on 1297, 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 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 Sinosoft Technology Group. You can find everything you need to know about Sinosoft Technology Group in the latest infographic research report. If you are no longer interested in Sinosoft Technology 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.