Mi Technovation Berhad (KLSE:MI), is not the largest company out there, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM4.73 and falling to the lows of RM3.09. 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 Mi Technovation Berhad's current trading price of RM3.11 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 Mi Technovation Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is Mi Technovation Berhad worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15.93% above my intrinsic value, which means if you buy Mi Technovation Berhad today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is MYR2.68, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Mi Technovation 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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Mi Technovation Berhad generate?
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. Mi Technovation Berhad's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger 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 MI’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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on MI, 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.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Mi Technovation Berhad has 4 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
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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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