Stock Analysis

Is It Time To Consider Buying AEM Holdings Ltd (SGX:AWX)?

SGX:AWX
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While AEM Holdings Ltd (SGX:AWX) might not be the most widely known stock at the moment, it saw a double-digit share price rise of over 10% in the past couple of months on the SGX. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine AEM Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for AEM Holdings

What's the opportunity in AEM Holdings?

Good news, investors! AEM Holdings is still a bargain right now. According to my valuation, the intrinsic value for the stock is SGD4.99, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, AEM Holdings’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from AEM Holdings?

earnings-and-revenue-growth
SGX:AWX Earnings and Revenue Growth March 18th 2021

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. However, with a relatively muted profit growth of 7.0% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for AEM Holdings, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since AWX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AWX for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AWX. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

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 instance, we've identified 2 warning signs for AEM Holdings (1 shouldn't be ignored) you should be familiar with.

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Valuation is complex, but we're helping make it simple.

Find out whether AEM Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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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