GL Limited (SGX:B16), a hospitality company based in Singapore, saw significant share price volatility over the past couple of months on the SGX, rising to the highs of SGD0.89 and falling to the lows of SGD0.78. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether GL’s current trading price of SGD0.79 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 GL’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 GL

What’s the opportunity in GL?

Good news, investors! GL is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that GL’s ratio of 14.7x is below its peer average of 22.41x, which suggests the stock is undervalued compared to the Hospitality industry. Another thing to keep in mind is that GL’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from GL?

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. GL’s earnings over the next few years are expected to increase by 38.60%, 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? Since B16 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 B16 for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy B16. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.