What Does George Kent (Malaysia) Berhad's (KLSE:GKENT) Share Price Indicate?

George Kent (Malaysia) Berhad (KLSE:GKENT), might not be a large cap stock, but it saw a decent share price growth in the teens level on the KLSE over the last few months. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at George Kent (Malaysia) Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for George Kent (Malaysia) Berhad

Is George Kent (Malaysia) Berhad still cheap?

According to my valuation model, George Kent (Malaysia) Berhad seems to be fairly priced at around 2.41% above my intrinsic value, which means if you buy George Kent (Malaysia) Berhad today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth MYR0.73, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that George Kent (Malaysia) Berhad’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of George Kent (Malaysia) Berhad look like?

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. 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. With profit expected to grow by 41% over the next couple of years, the future seems bright for George Kent (Malaysia) Berhad. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? GKENT’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on GKENT, now may not be the most optimal 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 want to dive deeper into George Kent (Malaysia) Berhad, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 2 warning signs for George Kent (Malaysia) Berhad you should know about.

If you are no longer interested in George Kent (Malaysia) Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

If you’re looking to trade George Kent (Malaysia) Berhad, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.