Is It Time To Consider Buying D & O Green Technologies Berhad (KLSE:D&O)?

D & O Green Technologies Berhad (KLSE:D&O), might not be a large cap stock, but it saw a decent share price growth in the teens level on the KLSE over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on D & O Green Technologies Berhad’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for D & O Green Technologies Berhad

Is D & O Green Technologies Berhad Still Cheap?

D & O Green Technologies Berhad appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and 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 60.95x is currently well-above the industry average of 25.66x, 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? Since D & O Green Technologies Berhad’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from D & O Green Technologies Berhad?

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. D & O Green Technologies Berhad's earnings over the next few years are expected to increase by 81%, 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 D&O’s positive outlook, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe D&O 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 tabs on D&O for some time, 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 D&O, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about D & O Green Technologies Berhad as a business, it's important to be aware of any risks it's facing. Be aware that D & O Green Technologies Berhad is showing 2 warning signs in our investment analysis and 1 of those shouldn't be ignored...

If you are no longer interested in D & O Green Technologies 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.