What Is Halwani Bros. Co. Ltd.'s (TADAWUL:6001) Share Price Doing?

By
Simply Wall St
Published
May 14, 2022
SASE:6001
Source: Shutterstock

Halwani Bros. Co. Ltd. (TADAWUL:6001), might not be a large cap stock, but it saw significant share price movement during recent months on the SASE, rising to highs of ر.س95.10 and falling to the lows of ر.س76.60. 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 Halwani Bros' current trading price of ر.س76.60 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 Halwani Bros’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 Halwani Bros

Is Halwani Bros still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 14% below my intrinsic value, which means if you buy Halwani Bros today, you’d be paying a reasonable price for it. And if you believe the company’s true value is SAR89.14, then there isn’t much room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Halwani Bros’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 Halwani Bros generate?

earnings-and-revenue-growth
SASE:6001 Earnings and Revenue Growth May 14th 2022

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. 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. With profit expected to grow by 85% over the next couple of years, the future seems bright for Halwani Bros. 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? 6001’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 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 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Halwani Bros has 1 warning sign and it would be unwise to ignore it.

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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