At RM4.59, Is It Time To Put Pentamaster Corporation Berhad (KLSE:PENTA) On Your Watch List?

By
Simply Wall St
Published
June 13, 2021
KLSE:PENTA
Source: Shutterstock

Pentamaster Corporation Berhad (KLSE:PENTA), is not the largest company out there, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM6.20 and falling to the lows of RM4.55. 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 Pentamaster Corporation Berhad's current trading price of RM4.59 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 Pentamaster Corporation 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 our latest analysis for Pentamaster Corporation Berhad

Is Pentamaster Corporation Berhad still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 2.8% below my intrinsic value, which means if you buy Pentamaster Corporation Berhad today, you’d be paying a reasonable price for it. And if you believe the company’s true value is MYR4.72, then there’s not much of an upside to gain from mispricing. Furthermore, Pentamaster Corporation Berhad’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Pentamaster Corporation Berhad?

earnings-and-revenue-growth
KLSE:PENTA Earnings and Revenue Growth June 14th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 grow by 97% over the next couple of years, the future seems bright for Pentamaster Corporation 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 already priced in PENTA’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 PENTA, 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.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that Pentamaster Corporation Berhad has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Pentamaster Corporation 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 for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.