Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Fu Yu Corporation Limited (SGX:F13), which is in the machinery business, and is based in Singapore, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of SGD0.20 to SGD0.22. However, is this the true valuation level of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Fu Yu’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 Fu Yu

Is Fu Yu still cheap?

The stock is currently trading at S$0.21 on the share market, which means it is overvalued by 24.34% compared to my intrinsic value of SGD0.17. Not the best news for investors looking to buy! In addition to this, it seems like Fu Yu’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

Can we expect growth from Fu Yu?

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 a double-digit 13% over the next couple of years, the outlook is positive for Fu Yu. 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? It seems like the market has well and truly priced in F13’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe F13 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on F13 for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for F13, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Fu Yu. You can find everything you need to know about Fu Yu in the latest infographic research report. If you are no longer interested in Fu Yu, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.