Should You Investigate GDB Holdings Berhad (KLSE:GDB) At RM0.15?

GDB Holdings Berhad (KLSE:GDB), might not be a large cap stock, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.31 and falling to the lows of RM0.15. 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 GDB Holdings Berhad's current trading price of RM0.15 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 GDB Holdings Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out the opportunities and risks within the MY Construction industry.

What's The Opportunity In GDB Holdings Berhad?

According to my valuation model, GDB Holdings Berhad seems to be fairly priced at around 0.9% below my intrinsic value, which means if you buy GDB Holdings Berhad today, you’d be paying a reasonable price for it. And if you believe the company’s true value is MYR0.16, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because GDB 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.

Can we expect growth from GDB Holdings Berhad?

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. However, with a relatively muted profit growth of 4.9% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for GDB Holdings Berhad, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in GDB’s future outlook, 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 an eye on GDB, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 5 warning signs for GDB Holdings Berhad (1 is a bit concerning) you should be familiar with.

If you are no longer interested in GDB 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.