Yahoo Finance Why Media Prima Berhad (KLSE:MEDIA) Could Be Worth Watching
While Media Prima Berhad (KLSE:MEDIA) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the KLSE, rising to highs of RM0.46 and falling to the lows of RM0.41. 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 Media Prima Berhad's current trading price of RM0.42 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 Media Prima Berhad’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Media Prima Berhad
Is Media Prima Berhad Still Cheap?
Good news, investors! Media Prima Berhad is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Media Prima Berhad’s ratio of 10.81x is below its peer average of 15.65x, which indicates the stock is trading at a lower price compared to the Media industry. However, given that Media Prima Berhad’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.
What kind of growth will Media Prima Berhad generate?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. With profit expected to grow by a double-digit 15% over the next couple of years, the outlook is positive for Media Prima Berhad. 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 MEDIA is currently below the industry PE ratio, 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 capital structure to consider, which could explain the current price multiple.
Are you a potential investor? If you’ve been keeping an eye on MEDIA for a while, now might be the time to make a leap. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MEDIA. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
If you'd like to know more about Media Prima Berhad as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Media Prima Berhad, and understanding this should be part of your investment process.
If you are no longer interested in Media Prima Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
