Vard Holdings Limited (SGX:MS7), a machinery company based in Norway, received a lot of attention from a substantial price movement on the SGX in the over the last few months, increasing to SGD0.27 at one point, and dropping to the lows of SGD0.24. 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 MS7’s current trading price of SGD0.25 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 MS7’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 MS7
Is MS7 still cheap?
Good news, investors! MS7 is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SGD1.21, but it is currently trading at SGD0.25 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, MS7’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because MS7’s stock is less volatile than the wider market given its low beta.
What does the future of MS7 look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to grow by 46.31% over the next year, the near-term future seems bright for MS7. It looks like higher cash flows 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 MS7 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 MS7 for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MS7. 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 buy.