Kumpulan Perangsang Selangor Berhad (KLSE:KPS), is not the largest company out there, but it maintained its current share price over the past couple of month on the KLSE, with a relatively tight range of RM0.68 to RM0.72. However, does this price actually reflect the true value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Kumpulan Perangsang Selangor 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 Kumpulan Perangsang Selangor Berhad

What's The Opportunity In Kumpulan Perangsang Selangor Berhad?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 16% below my intrinsic value, which means if you buy Kumpulan Perangsang Selangor Berhad today, you’d be paying a fair price for it. And if you believe the company’s true value is MYR0.83, then there isn’t much room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Kumpulan Perangsang Selangor 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 kind of growth will Kumpulan Perangsang Selangor Berhad 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 next year, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Kumpulan Perangsang Selangor Berhad, at least in the near future.

What This Means For You

Are you a shareholder? Currently, KPS 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 reduce the risk in your portfolio. Is your current exposure to the stock optimal 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.