At RM0.93, Is Mah Sing Group Berhad (KLSE:MAHSING) Worth Looking At Closely?

Mah Sing Group Berhad (KLSE:MAHSING), is not the largest company out there, but it led the KLSE gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Mah Sing Group Berhad’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Mah Sing Group Berhad

What's the opportunity in Mah Sing Group Berhad?

According to my valuation model, Mah Sing Group Berhad seems to be fairly priced at around 10.58% above my intrinsic value, which means if you buy Mah Sing Group Berhad today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is MYR0.84, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Mah Sing Group 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 does the future of Mah Sing Group 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. With profit expected to more than double over the next couple of years, the future seems bright for Mah Sing Group 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 MAHSING’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on MAHSING, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining 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. In terms of investment risks, we've identified 3 warning signs with Mah Sing Group Berhad, and understanding these should be part of your investment process.

If you are no longer interested in Mah Sing Group Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

If you decide to trade Mah Sing Group Berhad, 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@simplywallst.com.