Should You Investigate Boustead Projects Limited (SGX:AVM) At S$1.06?

While Boustead Projects Limited (SGX:AVM) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the SGX, rising to highs of S$1.09 and falling to the lows of S$0.97. 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 Boustead Projects' current trading price of S$1.06 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 Boustead Projects’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 Boustead Projects

What's the opportunity in Boustead Projects?

According to my valuation model, Boustead Projects seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Boustead Projects today, you’d be paying a fair price for it. And if you believe that the stock is really worth SGD1.27, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Boustead Projects’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Boustead Projects?

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 69% over the next couple of years, the future seems bright for Boustead Projects. 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? AVM’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 an eye on AVM, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which 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.

If you want to dive deeper into Boustead Projects, you'd also look into what risks it is currently facing. For instance, we've identified 2 warning signs for Boustead Projects (1 shouldn't be ignored) you should be familiar with.

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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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