Today we’re going to take a look at the well-established PICC Property and Casualty Company Limited (SEHK:2328). The company’s stock received a lot of attention from a substantial price movement on the SEHK in the over the last few months, increasing to HK$16.82 at one point, and dropping to the lows of HK$13.68. 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 PICC Property and Casualty’s current trading price of HK$15 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at PICC Property and Casualty’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 PICC Property and Casualty
What’s the opportunity in PICC Property and Casualty?
Great news for investors – PICC Property and Casualty is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is HK$22.77, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because PICC Property and Casualty’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from PICC Property and Casualty?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 23.69% over the next couple of years, the future seems bright for PICC Property and Casualty. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since PICC Property and Casualty is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.