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Let’s talk about the popular CK Asset Holdings Limited (HKG:1113). The company’s shares saw a decent share price growth in the teens level on the SEHK over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine CK Asset Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for CK Asset Holdings
What’s the opportunity in CK Asset Holdings?
Great news for investors – CK Asset Holdings is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$113.6, 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, CK Asset 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.
What kind of growth will CK Asset Holdings generate?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for CK Asset Holdings, at least in the near future.
What this means for you:
Are you a shareholder? Although 1113 is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to 1113, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on 1113 for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on CK Asset Holdings. You can find everything you need to know about CK Asset Holdings in the latest infographic research report. If you are no longer interested in CK Asset Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.