PC Partner Group Limited (HKG:1263), which is in the tech business, and is based in Hong Kong,
received a lot of attention from a substantial price increase on the SEHK over the last few months.
As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy?
Let’s take a look at PC Partner Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What’s the opportunity in PC Partner Group?
Great news for investors – PC Partner Group is still trading at a fairly cheap price.
According to my valuation,
the intrinsic value for the stock is HK$3.26,
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 PC Partner Group’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 does the future of PC Partner Group look like?
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.
However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for PC Partner Group, at least in the near future.
What this means for you:
Are you a shareholder?
Although 1263 is currently undervalued,
the adverse prospect of negative growth brings about some degree of risk.
whether you want to increase your portfolio exposure to 1263, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor?
If you’ve been
keeping tabs on 1263 for some time,
but hesitant on making the leap, I recommend you
dig deeper into the stock.
Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on PC Partner Group. You can find everything you need to know about PC Partner Group in the latest infographic research report. If you are no longer interested in PC Partner Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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