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SATS Ltd. (SGX:S58), is not the largest company out there, but it received a lot of attention from a substantial price movement on the SGX over the last few months, increasing to S$2.85 at one point, and dropping to the lows of S$2.42. 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 SATS' current trading price of S$2.57 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 SATS’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 SATS
What's The Opportunity In SATS?
Great news for investors – SATS is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is SGD3.98, but it is currently trading at S$2.57 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, SATS’s share price is theoretically 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.
Can we expect growth from SATS?
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. With profit expected to more than double over the next couple of years, the future seems bright for SATS. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? Since S58 is currently undervalued, it may be a great time to accumulate more of 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on S58 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 S58. 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 investment decision.