Asian Pay Television Trust (SGX:S7OU), a media company based in Singapore, received a lot of attention from a substantial price movement on the SGX over the last few months, increasing to SGD0.58 at one point, and dropping to the lows of SGD0.5. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Asian Pay Television Trust’s current trading price of SGD0.5 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 Asian Pay Television Trust’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Asian Pay Television Trust
Is Asian Pay Television Trust still cheap?According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Asian Pay Television Trust’s ratio of 19.71x is trading slightly above its industry peers’ ratio of 16.74x, which means if you buy Asian Pay Television Trust today, you’d be paying a relatively fair price for it. And if you believe that Asian Pay Television Trust should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like Asian Pay Television Trust’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What does the future of Asian Pay Television Trust look like?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. 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. Asian Pay Television Trust’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? It seems like the market has already priced in S7OU’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at S7OU? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on S7OU, 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 S7OU, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Asian Pay Television Trust. You can find everything you need to know about Asian Pay Television Trust in the latest infographic research report. If you are no longer interested in Asian Pay Television Trust, you can use our free platform to see my list of over 50 other stocks with a high growth potential.