Bonia Corporation Berhad (KLSE:BONIA), is not the largest company out there, but it saw significant share price movement during recent months on the KLSE, rising to highs of RM1.90 and falling to the lows of RM1.68. 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 Bonia Corporation Berhad's current trading price of RM1.70 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 Bonia Corporation Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Bonia Corporation Berhad
What Is Bonia Corporation Berhad Worth?
Great news for investors – Bonia Corporation Berhad is still trading at a fairly cheap price 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 Bonia Corporation Berhad’s ratio of 6.21x is below its peer average of 11.44x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. Although, there may be another chance to buy again in the future. This is because Bonia Corporation Berhad’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Bonia Corporation Berhad 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. 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. However, with a relatively muted profit growth of 1.3% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Bonia Corporation Berhad, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since BONIA is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.