At S$1.18, Is It Time To Put Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) On Your Watch List?

Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SGX over the last few months, increasing to S$1.39 at one point, and dropping to the lows of S$1.18. 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 Yangzijiang Shipbuilding (Holdings)'s current trading price of S$1.18 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Yangzijiang Shipbuilding (Holdings)’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 Yangzijiang Shipbuilding (Holdings)

Is Yangzijiang Shipbuilding (Holdings) Still Cheap?

According to my valuation model, the stock is currently overvalued by about 27%, trading at S$1.18 compared to my intrinsic value of SGD0.93. This means that the opportunity to buy Yangzijiang Shipbuilding (Holdings) at a good price has disappeared! Furthermore, Yangzijiang Shipbuilding (Holdings)’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from Yangzijiang Shipbuilding (Holdings)?

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. Yangzijiang Shipbuilding (Holdings)'s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? BS6’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe BS6 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 BS6 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 BS6, which means it’s worth diving deeper into other factors 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. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Yangzijiang Shipbuilding (Holdings).

If you are no longer interested in Yangzijiang Shipbuilding (Holdings), 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.