Far East Consortium International Limited (HKG:35), which is in the real estate business, and is based in Hong Kong, saw significant share price movement during recent months on the SEHK, rising to highs of HK$4.00 and falling to the lows of HK$2.61. 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 Far East Consortium International's current trading price of HK$2.61 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 Far East Consortium International’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 Far East Consortium International
Is Far East Consortium International still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12% below my intrinsic value, which means if you buy Far East Consortium International today, you’d be paying a fair price for it. And if you believe that the stock is really worth HK$2.97, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Far East Consortium International’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Far East Consortium International 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Far East Consortium International, at least in the near future.
What this means for you:
Are you a shareholder? Currently, 35 appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.