Plover Bay Technologies Limited (HKG:1523), which is in the communications business, and is based in Hong Kong, saw significant share price movement during recent months on the SEHK, rising to highs of HK$1.11 and falling to the lows of HK$0.92. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Plover Bay Technologies’s current trading price of HK$1.00 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Plover Bay Technologies’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Plover Bay Technologies worth?
Good news, investors! Plover Bay Technologies is still a bargain right now according to my price multiple model, which compares 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 Plover Bay Technologies’s ratio of 11.07x is below its peer average of 20.09x, which indicates the stock is trading at a lower price compared to the Communications industry. What’s more interesting is that, Plover Bay Technologies’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 Plover Bay Technologies 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. However, with a relatively muted profit growth of 7.4% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Plover Bay Technologies, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since 1523 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on 1523 for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 1523. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Plover Bay Technologies. You can find everything you need to know about Plover Bay Technologies in the latest infographic research report. If you are no longer interested in Plover Bay Technologies, you can use our free platform to see my 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. 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. Thank you for reading.