Stock Analysis

Is There Now An Opportunity In Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY)?

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KLSE:MRDIY
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Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM2.11 at one point, and dropping to the lows of RM1.65. 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 Mr D.I.Y. Group (M) Berhad's current trading price of RM1.65 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Mr D.I.Y. Group (M) Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Mr D.I.Y. Group (M) Berhad

Is Mr D.I.Y. Group (M) Berhad Still Cheap?

Mr D.I.Y. Group (M) Berhad is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 32.91x is currently well-above the industry average of 10.52x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Given that Mr D.I.Y. Group (M) 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.

Can we expect growth from Mr D.I.Y. Group (M) Berhad?

earnings-and-revenue-growth
KLSE:MRDIY Earnings and Revenue Growth March 18th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Mr D.I.Y. Group (M) Berhad's earnings over the next few years are expected to increase by 62%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in MRDIY’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe MRDIY should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio 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 an eye on MRDIY for a while, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for MRDIY, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Mr D.I.Y. Group (M) Berhad from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Mr D.I.Y. Group (M) 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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