In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
IGG Inc (HKG:799), which is in the entertainment business, and is based in Singapore, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$12.72 at one point, and dropping to the lows of HK$8.66. 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 IGG's current trading price of HK$8.75 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 IGG’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for IGG
What's the opportunity in IGG?
Good news, investors! IGG is still a bargain right now. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 7.61x is currently well-below the industry average of 13.61x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, IGG’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 the stock is less volatile than the wider market given its low beta.
What kind of growth will IGG 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. IGG’s earnings over the next few years are expected to increase by 24%, 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? Since 799 is currently undervalued, it may be a great time to increase 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 799 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 799. 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 investment decision.