What Does Evergreen Fibreboard Berhad's (KLSE:EVERGRN) Share Price Indicate?

Evergreen Fibreboard Berhad (KLSE:EVERGRN), is not the largest company out there, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.29 and falling to the lows of RM0.19. 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 Evergreen Fibreboard Berhad's current trading price of RM0.19 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 Evergreen Fibreboard Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

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What's The Opportunity In Evergreen Fibreboard Berhad?

Evergreen Fibreboard Berhad appears to be overvalued by 34% at the moment, based on our discounted cash flow valuation. The stock is currently priced at RM0.19 on the market compared to our intrinsic value of MYR0.14. This means that the opportunity to buy Evergreen Fibreboard Berhad at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Evergreen Fibreboard 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 Evergreen Fibreboard Berhad

Can we expect growth from Evergreen Fibreboard Berhad?

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. With profit expected to more than double over the next couple of years, the future seems bright for Evergreen Fibreboard 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? EVERGRN’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe EVERGRN should trade below its current price, selling high and buying it back up again when its price falls towards its real value 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 EVERGRN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for EVERGRN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Evergreen Fibreboard Berhad at this point in time. While conducting our analysis, we found that Evergreen Fibreboard Berhad has 1 warning sign and it would be unwise to ignore this.

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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.