While CJ Century Logistics Holdings Berhad (KLSE:CJCEN) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM0.51 at one point, and dropping to the lows of RM0.46. 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 CJ Century Logistics Holdings Berhad's current trading price of RM0.49 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 CJ Century Logistics 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 CJ Century Logistics Holdings Berhad
What's The Opportunity In CJ Century Logistics Holdings Berhad?
Good news, investors! CJ Century Logistics Holdings Berhad is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 10.13x is currently well-below the industry average of 79.88x, meaning that it is trading at a cheaper price relative to its peers. However, given that CJ Century Logistics Holdings Berhad’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from CJ Century Logistics Holdings Berhad?
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. With profit expected to grow by 57% over the next couple of years, the future seems bright for CJ Century Logistics Holdings Berhad. It looks like higher cash flow 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 CJCEN is currently below the industry PE ratio, it may be a great time to increase 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 capital structure to consider, which could explain the current price multiple.