Is Now An Opportune Moment To Examine 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 received a lot of attention from a substantial price increase on the KLSE over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? 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.

View our latest analysis for D & O Green Technologies Berhad

Is D & O Green Technologies Berhad still cheap?

According to my valuation model, D & O Green Technologies Berhad seems to be fairly priced at around 2.3% below my intrinsic value, which means if you buy D & O Green Technologies Berhad today, you’d be paying a fair price for it. And if you believe the company’s true value is MYR4.60, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since D & O Green Technologies Berhad’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.

What does the future of D & O Green Technologies Berhad look like?

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. In the upcoming year, D & O Green Technologies Berhad's earnings are expected to increase by 80%, 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? D&O’s optimistic future growth appears to have been factored into the current share price, 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 D&O, 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 further examining other factors such as the strength of its balance sheet, 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 D & O Green Technologies Berhad at this point in time. Every company has risks, and we've spotted 1 warning sign for D & O Green Technologies Berhad you should know about.

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. 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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