At RM0.91, Is Muhibbah Engineering (M) Bhd. (KLSE:MUHIBAH) Worth Looking At Closely?

Muhibbah Engineering (M) Bhd. (KLSE:MUHIBAH), is not the largest company out there, but it led the KLSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. 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? Let’s take a look at Muhibbah Engineering (M) Bhd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Muhibbah Engineering (M) Bhd

Is Muhibbah Engineering (M) Bhd Still Cheap?

Good news, investors! Muhibbah Engineering (M) Bhd is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is MYR1.27, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Muhibbah Engineering (M) Bhd’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Muhibbah Engineering (M) Bhd 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. Though in the case of Muhibbah Engineering (M) Bhd, it is expected to deliver a relatively unexciting top-line growth of 5.1% in the next few years, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since MUHIBAH is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MUHIBAH for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MUHIBAH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

It can be quite valuable to consider what analysts expect for Muhibbah Engineering (M) Bhd from their most recent forecasts. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Muhibbah Engineering (M) Bhd, 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.