While WCT Holdings Berhad (KLSE:WCT) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.47 and falling to the lows of RM0.40. 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 WCT Holdings Berhad’s current trading price of RM0.44 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 WCT Holdings Berhad’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 WCT Holdings Berhad
Is WCT Holdings Berhad Still Cheap?
According to my valuation model, WCT Holdings Berhad seems to be fairly priced at around 11% below my intrinsic value, which means if you buy WCT Holdings Berhad today, you’d be paying a fair price for it. And if you believe that the stock is really worth MYR0.49, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since WCT Holdings Berhad’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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.
What does the future of WCT Holdings Berhad look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of WCT Holdings Berhad, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? WCT seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on WCT for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on WCT should the price fluctuate below its true value.
If you want to dive deeper into WCT Holdings Berhad, you’d also look into what risks it is currently facing. For example – WCT Holdings Berhad has 2 warning signs we think you should be aware of.
If you are no longer interested in WCT Holdings Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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