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Red Star Macalline Group Corporation Ltd. (HKG:1528), which is in the real estate business, and is based in China, saw significant share price movement during recent months on the SEHK, rising to highs of HK$6.86 and falling to the lows of HK$5.68. 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 Red Star Macalline Group's current trading price of HK$5.80 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Red Star Macalline Group’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 Red Star Macalline Group
What is Red Star Macalline Group worth?
According to my valuation model, the stock is currently overvalued by about 29%, trading at HK$5.80 compared to my intrinsic value of HK$4.49. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Red Star Macalline Group’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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 Red Star Macalline Group 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. 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. Red Star Macalline Group’s earnings over the next few years are expected to increase by 51%, 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? It seems like the market has well and truly priced in 1528’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 1528 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.