While Yangzijiang Shipbuilding (Holdings) Ltd. (SGX:BS6) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the SGX. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. However, what if the stock is still a bargain? Let's examine Yangzijiang Shipbuilding (Holdings)'s valuation and outlook in more detail to determine if there's still a bargain opportunity.

Is Yangzijiang Shipbuilding (Holdings) Still Cheap?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We'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 8.91x is currently trading slightly below its industry peers' ratio of 9.06x, which means if you buy Yangzijiang Shipbuilding (Holdings) today, you'd be paying a decent price for it. And if you believe Yangzijiang Shipbuilding (Holdings) should be trading in this range, then there isn't much room for the share price to grow beyond the levels of other industry peers over the long-term. In addition to this, it seems like Yangzijiang Shipbuilding (Holdings)'s share price is quite stable, which could mean there may be less chances to buy low in the future now that it's trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

What kind of growth will Yangzijiang Shipbuilding (Holdings) generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Yangzijiang Shipbuilding (Holdings)'s earnings over the next few years are expected to increase by 35%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in BS6's positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at BS6? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you've been keeping tabs on BS6, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for BS6, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Yangzijiang Shipbuilding (Holdings) from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Yangzijiang Shipbuilding (Holdings), 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.