At RM3.19, Is It Time To Put Unisem (M) Berhad (KLSE:UNISEM) On …

Unisem (M) Berhad (KLSE:UNISEM), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the KLSE. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price?

Today I will analyse the most recent data on Unisem (M) Berhad’s outlook and valuation to see if the opportunity still exists. Check out our latest analysis for Unisem (M) Berhad

What’s The Opportunity In Unisem (M) Berhad?

Good news, investors! Unisem (M) 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.

I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 21.93x is currently well-below the industry average of 29.93x, meaning that it is trading at a cheaper price relative to its peers. However, given that Unisem (M) 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.

Can we expect growth from Unisem (M) Berhad?

earnings-and-revenue-growthKLSE:UNISEM Earnings and Revenue Growth April 4th 2023

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. 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. Unisem (M) Berhad’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead.

This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since UNISEM 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 UNISEM for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy UNISEM. 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 assessment.

So while earnings quality is important, it’s equally important to consider the risks facing Unisem (M) Berhad at this point in time. For example, Unisem (M) Berhad has 2 warning signs (and 1 which shouldn’t be ignored) we think you should know about. If you are no longer interested in Unisem (M) Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we’re helping make it simple.

Find out whether Unisem (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article?

Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.

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