Indofood Agri Resources Ltd (SGX:5JS), a food company based in Singapore, received a lot of attention from a substantial price movement on the SGX over the last few months, increasing to SGD0.4 at one point, and dropping to the lows of SGD0.32. 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 Indofood Agri Resources’s current trading price of SGD0.32 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 Indofood Agri Resources’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 Indofood Agri Resources

Is Indofood Agri Resources still cheap?

Good news, investors! Indofood Agri Resources is still a bargain right now. My valuation model shows that the intrinsic value for the stock is SGD1.53, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Indofood Agri Resources’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Indofood Agri Resources?

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. Indofood Agri Resources’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since 5JS is currently undervalued, it may be a great time to increase 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 5JS for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 5JS. 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Indofood Agri Resources. You can find everything you need to know about Indofood Agri Resources in the latest infographic research report. If you are no longer interested in Indofood Agri Resources, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.