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Unisem (M) Berhad (KLSE:UNISEM), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM3.62 at one point, and dropping to the lows of RM3.13. 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 Unisem (M) Berhad's current trading price of RM3.14 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 Unisem (M) 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 Unisem (M) Berhad
Is Unisem (M) Berhad Still Cheap?
The share price seems sensible at the moment according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Unisem (M) Berhad’s ratio of 33.73x is trading in-line with its industry peers’ ratio, which means if you buy Unisem (M) Berhad today, you’d be paying a relatively reasonable price for it. So, is there another chance to buy low in the future? Given that Unisem (M) 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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Unisem (M) Berhad?
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. Unisem (M) Berhad's earnings over the next few years are expected to increase by 39%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in UNISEM’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at UNISEM? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?