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COSCO Shipping International (Singapore) Co Ltd. (SGX:F83), a machinery company based in Singapore, saw significant share price volatility over the past couple of months on the SGX, rising to the highs of SGD0.52 and falling to the lows of SGD0.42. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether COSCO Shipping International (Singapore)’s current trading price of SGD0.46 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 COSCO Shipping International (Singapore)’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 COSCO Shipping International (Singapore)
Is COSCO Shipping International (Singapore) still cheap?
Good news, investors! COSCO Shipping International (Singapore) is still a bargain right now. According to my valuation, the intrinsic value for the stock is SGD7.66, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Although, there may be another chance to buy again in the future. This is because COSCO Shipping International (Singapore)’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 COSCO Shipping International (Singapore) generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of COSCO Shipping International (Singapore), it is expected to deliver a highly negative earnings growth in the upcoming, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Although F83 is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to F83, or whether diversifying into another stock may be a better move for your total risk and return.