What Is Protasco Berhad's (KLSE:PRTASCO) Share Price Doing?

While Protasco Berhad (KLSE:PRTASCO) might not be the most widely known stock at the moment, it led the KLSE gainers with a relatively large price hike in the past couple of weeks. 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 I will analyse the most recent data on Protasco Berhad’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Protasco Berhad

What's the opportunity in Protasco Berhad?

Good news, investors! Protasco Berhad is still a bargain right now. According to my valuation, the intrinsic value for the stock is MYR0.35, but it is currently trading at RM0.24 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Protasco 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.

What kind of growth will Protasco Berhad generate?

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. Though in the case of Protasco Berhad, it is expected to deliver a negative earnings growth of -8.9%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although PRTASCO is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to PRTASCO, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on PRTASCO for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about Protasco Berhad as a business, it's important to be aware of any risks it's facing. Be aware that Protasco Berhad is showing 2 warning signs in our investment analysis and 1 of those doesn't sit too well with us...

If you are no longer interested in Protasco 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. 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.
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