GDEX Berhad (KLSE:GDEX), might not be a large cap stock, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.45 and falling to the lows of RM0.35. 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 GDEX Berhad's current trading price of RM0.36 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 GDEX 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 GDEX Berhad
What is GDEX Berhad worth?
According to my valuation model, GDEX Berhad seems to be fairly priced at around 13% below my intrinsic value, which means if you buy GDEX Berhad today, you’d be paying a reasonable price for it. And if you believe the company’s true value is MYR0.42, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since GDEX 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 kind of growth will GDEX Berhad generate?
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. 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. With profit expected to grow by 41% over the next couple of years, the future seems bright for GDEX 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 GDEX’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 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 an eye on GDEX, 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. In terms of investment risks, we've identified 1 warning sign with GDEX Berhad, and understanding it should be part of your investment process.
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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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About KLSE:GDEX
GDEX Berhad
An investment holding company, provides express delivery and logistics services in Malaysia, Vietnam, Indonesia, and Singapore.
Adequate balance sheet minimal.
