At RM0.67, Is Perak Transit Berhad (KLSE:PTRANS) Worth Looking At Closely?

Perak Transit Berhad (KLSE:PTRANS), might not be a large cap stock, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.88 and falling to the lows of RM0.64. 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 Perak Transit Berhad's current trading price of RM0.67 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 Perak Transit Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Perak Transit Berhad

What's the opportunity in Perak Transit Berhad?

The stock is currently trading at RM0.67 on the share market, which means it is overvalued by 39% compared to my intrinsic value of MYR0.48. This means that the opportunity to buy Perak Transit Berhad at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Perak Transit 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 Perak Transit 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. With profit expected to grow by 35% over the next couple of years, the future seems bright for Perak Transit 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 well and truly priced in PTRANS’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe PTRANS should trade below its current price, selling high and buying it back up again when its price falls towards its real value 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 PTRANS for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for PTRANS, which means it’s worth diving deeper into other factors 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. You'd be interested to know, that we found 4 warning signs for Perak Transit Berhad and you'll want to know about them.

If you are no longer interested in Perak Transit 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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