Pentamaster International Limited (HKG:1665), which is in the semiconductor business, and is based in Malaysia, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$2.36 at one point, and dropping to the lows of HK$1.80. 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 Pentamaster International's current trading price of HK$1.88 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 Pentamaster International’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 Pentamaster International

Is Pentamaster International still cheap?

Good news, investors! Pentamaster International is still a bargain right now. My valuation model shows that the intrinsic value for the stock is HK$2.45, but it is currently trading at HK$1.88 on the share market, meaning that there is still an opportunity to buy now. Pentamaster International’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Pentamaster International generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Pentamaster International’s earnings over the next few years are expected to increase by 49%, 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 1665 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 1665 for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 1665. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.