At ر.س61.40, Is It Time To Put Halwani Bros. Co. Ltd. (TADAWUL:6001) On Your Watch List?

Halwani Bros. Co. Ltd. (TADAWUL:6001), is not the largest company out there, but it led the SASE gainers with a relatively large price hike in the past couple of weeks. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. Less-covered, small caps tend to present 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? Let’s take a look at Halwani Bros’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Halwani Bros

What Is Halwani Bros Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.7% below our intrinsic value, which means if you buy Halwani Bros today, you’d be paying a fair price for it. And if you believe that the stock is really worth SAR68.01, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Halwani Bros’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Halwani Bros 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. However, with a relatively muted revenue growth of 8.8% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Halwani Bros, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 6001’s future 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 6001, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Halwani Bros.

If you are no longer interested in Halwani Bros, 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.