Is Now The Time To Look At Buying Tomypak Holdings Berhad (KLSE:TOMYPAK)?

Tomypak Holdings Berhad (KLSE:TOMYPAK), is not the largest company out there, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.93 and falling to the lows of RM0.70. 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 Tomypak Holdings Berhad's current trading price of RM0.72 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 Tomypak Holdings 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 Tomypak Holdings Berhad

What's the opportunity in Tomypak Holdings Berhad?

According to my valuation model, Tomypak Holdings Berhad seems to be fairly priced at around 11% below my intrinsic value, which means if you buy Tomypak Holdings Berhad today, you’d be paying a reasonable price for it. And if you believe the company’s true value is MYR0.82, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Tomypak Holdings 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.

Can we expect growth from Tomypak Holdings Berhad?

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. Tomypak Holdings Berhad's revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? It seems like the market has already priced in TOMYPAK’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on TOMYPAK, now may not be the most advantageous 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. At Simply Wall St, we found 3 warning signs for Tomypak Holdings Berhad and we think they deserve your attention.

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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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