Sinotrans Limited (HKG:598), which is in the logistics business, and is based in China, saw significant share price movement during recent months on the SEHK, rising to highs of HK$2.60 and falling to the lows of HK$2.31. 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 Sinotrans's current trading price of HK$2.42 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 Sinotrans’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 Sinotrans

What's the opportunity in Sinotrans?

Great news for investors – Sinotrans is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$3.31, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Sinotrans’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Sinotrans look like?

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. However, with a relatively muted profit growth of 4.2% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Sinotrans, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since 598 is currently undervalued, it may be a great time to increase your holdings in the stock. 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 598 for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 598. 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 buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Sinotrans. You can find everything you need to know about Sinotrans in the latest infographic research report. If you are no longer interested in Sinotrans, 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 editorial-team@simplywallst.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.