SKP Resources Bhd (KLSE:SKPRES), is not the largest company out there, but it received a lot of attention from a substantial price movement on the KLSE over the last few months, increasing to RM1.03 at one point, and dropping to the lows of RM0.75. 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 SKP Resources Bhd's current trading price of RM0.78 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 SKP Resources Bhd’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 SKP Resources Bhd
What Is SKP Resources Bhd Worth?
According to our valuation model, SKP Resources Bhd seems to be fairly priced at around 19.59% above our intrinsic value, which means if you buy SKP Resources Bhd today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is MYR0.65, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because SKP Resources Bhd’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 kind of growth will SKP Resources Bhd generate?
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 48% over the next couple of years, the future seems bright for SKP Resources Bhd. 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 already priced in SKPRES’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?