Should You Think About Buying Boustead Plantations Berhad (KLSE:BPLANT) Now?

Boustead Plantations Berhad (KLSE:BPLANT), is not the largest company out there, but it received a lot of attention from a substantial price increase on the KLSE over the last few months. 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 Boustead Plantations Berhad’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Boustead Plantations Berhad

What is Boustead Plantations Berhad worth?

Great news for investors – Boustead Plantations Berhad is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is MYR1.43, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Boustead Plantations 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.

What does the future of Boustead Plantations 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. Though in the case of Boustead Plantations Berhad, it is expected to deliver a highly negative earnings growth in the next few years, 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 BPLANT is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to BPLANT, 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 tabs on BPLANT for some time, 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 Boustead Plantations Berhad as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Boustead Plantations Berhad (1 is a bit concerning!) and we strongly recommend you look at them before investing.

If you are no longer interested in Boustead Plantations 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.