At RM0.37, Is Econpile Holdings Berhad (KLSE:ECONBHD) Worth Looking At Closely?

Econpile Holdings Berhad (KLSE:ECONBHD), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM0.55 at one point, and dropping to the lows of RM0.37. 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 Econpile Holdings Berhad's current trading price of RM0.37 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 Econpile Holdings Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Econpile Holdings Berhad

What Is Econpile Holdings Berhad Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.26% above our intrinsic value, which means if you buy Econpile Holdings Berhad today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth MYR0.35, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Econpile Holdings Berhad’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Econpile Holdings 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. 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 Econpile Holdings Berhad's case, its revenues over the next few years are expected to grow by 50%, 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? ECONBHD’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 track record of its management team. 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 ECONBHD, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

If you'd like to know more about Econpile Holdings Berhad as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Econpile Holdings Berhad, and understanding this should be part of your investment process.

If you are no longer interested in Econpile Holdings 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.