At RM0.68, Is It Time To Put Jati Tinggi Group Berhad (KLSE:JTGROUP) On Your Watch List?

While Jati Tinggi Group Berhad (KLSE:JTGROUP) might not have the largest market cap around , it saw a decent share price growth of 13% on the KLSE over the last few months. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a small cap stock, hardly covered by any analysts, 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? Today we will analyse the most recent data on Jati Tinggi Group Berhad’s outlook and valuation to see if the opportunity still exists.

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What Is Jati Tinggi Group Berhad Worth?

Jati Tinggi Group Berhad is currently expensive based on our price multiple model, where we look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that Jati Tinggi Group Berhad’s ratio of 46.93x is above its peer average of 12.99x, which suggests the stock is trading at a higher price compared to the Construction industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Jati Tinggi Group 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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

View our latest analysis for Jati Tinggi Group Berhad

What does the future of Jati Tinggi Group 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. 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. With profit expected to more than double over the next couple of years, the future seems bright for Jati Tinggi Group 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? It seems like the market has well and truly priced in JTGROUP’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe JTGROUP should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on JTGROUP for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for JTGROUP, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Jati Tinggi Group Berhad, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 3 warning signs for Jati Tinggi Group Berhad you should know about.

If you are no longer interested in Jati Tinggi Group 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.