Yue Yuen Industrial (Holdings) Limited (HKG:551), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$9.11 at one point, and dropping to the lows of HK$7.34. 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 Yue Yuen Industrial (Holdings)'s current trading price of HK$7.90 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 Yue Yuen Industrial (Holdings)'s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What Is Yue Yuen Industrial (Holdings) Worth?
Good news, investors! Yue Yuen Industrial (Holdings) is still a bargain right now. According to our valuation, the intrinsic value for the stock is HK$11.53, but it is currently trading at HK$7.90 on the share market, meaning that there is still an opportunity to buy now. However, given that Yue Yuen Industrial (Holdings)'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.
What does the future of Yue Yuen Industrial (Holdings) look like?
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. With profit expected to grow by 85% over the next couple of years, the future seems bright for Yue Yuen Industrial (Holdings). 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 551 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic 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 undervaluation.
Are you a potential investor? If you've been keeping an eye on 551 for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 551. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
If you'd like to know more about Yue Yuen Industrial (Holdings) as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Yue Yuen Industrial (Holdings) you should be aware of.
If you are no longer interested in Yue Yuen Industrial (Holdings), you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.