The United Laboratories International Holdings Limited (SEHK:3933), a pharmaceuticals company based in Hong Kong, saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. 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? Today I will analyse the most recent data on United Laboratories International Holdings’s outlook and valuation to see if the opportunity still exists. View our latest analysis for United Laboratories International Holdings
What is United Laboratories International Holdings worth?The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9% above my intrinsic value, which means if you buy United Laboratories International Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth HK$6.56, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, it seems like United Laboratories International Holdings’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will United Laboratories International Holdings generate?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. United Laboratories International Holdings’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? United Laboratories International Holdings’s optimistic future growth appears to have been factored into the current share price, 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 United Laboratories International Holdings, 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 United Laboratories International Holdings. You can find everything you need to know about United Laboratories International Holdings in the latest infographic research report. If you are no longer interested in United Laboratories International Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.