A Look At The Fair Value Of P.A. Resources Berhad (KLSE:PA)
Current share price of RM0.18 suggests P.A. Resources Berhad is potentially trading close to its fair value
Industry average of 78% suggests P.A. Resources Berhad's peers are currently trading at a higher premium to fair value
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of P.A. Resources Berhad (KLSE:PA) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
As P.A. Resources Berhad operates in the metals and mining sector, we need to calculate the intrinsic value slightly differently. Instead of using free cash flows, which are hard to estimate and often not reported by analysts in this industry, dividends per share (DPS) payments are used. Unless a company pays out the majority of its FCF as a dividend, this method will typically underestimate the value of the stock. The 'Gordon Growth Model' is used, which simply assumes that dividend payments will continue to increase at a sustainable growth rate forever. For a number of reasons a very conservative growth rate is used that cannot exceed that of a company's Gross Domestic Product (GDP). In this case we used the 5-year average of the 10-year government bond yield (3.6%). The expected dividend per share is then discounted to today's value at a cost of equity of 9.3%. Relative to the current share price of RM0.2, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate)
= RM0.01 / (9.3% – 3.6%)
= RM0.2
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at P.A. Resources Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.3%, which is based on a levered beta of 0.956. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Check out our latest analysis for P.A. Resources Berhad
Strength
Debt is well covered by earnings.
Weakness
Earnings declined over the past year.
Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market.
Current share price is above our estimate of fair value.
Opportunity
PA's financial characteristics indicate limited near-term opportunities for shareholders.
Lack of analyst coverage makes it difficult to determine PA's earnings prospects.
Threat
Debt is not well covered by operating cash flow.
Paying a dividend but company has no free cash flows.
Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For P.A. Resources Berhad, we've compiled three important aspects you should consider:
Risks: We feel that you should assess the 2 warning signs for P.A. Resources Berhad we've flagged before making an investment in the company.
Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!
Other Top Analyst Picks: Interested to see what the analysts are thinking? Take a look at our interactive list of analysts' top stock picks to find out what they feel might have an attractive future outlook!
PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here.
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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
5 minutes ago
- Yahoo
Laksa-loving Ipoh native Win-Li Toh now heads Australia's Actuaries Institute
KUALA LUMPUR, Aug 10 — Laksa cravings. Long chats with old school friends. Strolling through Ipoh Garden and Woolley Food Court (formerly Woo Lee). These may sound like everyday Malaysian indulgences — but for Win-Li Toh, they are grounding rituals that keep her connected to home despite holding one of the most prestigious roles in Australia's insurance and finance sector. The Ipoh-born former Methodist Girls' School (MGS) student was recently named president of the Actuaries Institute of Australia, making her one of the few Malaysians to lead a profession often working quietly behind the scenes but increasingly shaping public policy on climate change, cyber risks and intergenerational inequality. She is only the second Asian to helm the institute since its establishment in 1949. Before her name appeared on the institute's presidential roll — and long before she began advising global insurance firms in Sydney and Auckland — Toh was just a bright girl from Ipoh who loved puzzles and never missed her mother's asam laksa. 'The first thing I do when I come back is eat asam laksa at home or at Woolley's,' she said with a laugh. 'Then I see my dad, my brother, my best friends. Only after eating, of course.' The Actuaries Medal belonging to the President of the Australian Actuaries Institute Win-Li Toh was shown during an interview session here at the Hilton Hotel, Kuala Lumpur. — Picture by Sayuti Zanudin Ipoh roots and Oxford dreams Toh was born and raised in Ipoh Garden, where her 90-something father, a retired doctor, still lives today with the help of a long-time family helper. She attended MGS Ipoh, where her love for mathematics took root. By 15, her academic talent was clear. Following in the footsteps of her elder siblings — one a doctor, the other an architect — she left Malaysia for Cheltenham Ladies' College in the UK to complete her A-levels. From there, she gained early admission to Oxford University to study pure mathematics. 'Oxford was a dream. I studied pure maths for three years and loved every moment of it,' she said. At Oxford, she met Dr Hilary Priestley, a mentor who rewarded 'elegant solutions' to complex problems with mini Mars bars. 'I only got one in three years, but I still remember the equation. It was the first time I understood the joy of solving a problem beautifully. It taught me that clarity of thought matters more than brute force,' she said. From maths to actuarial science After Oxford, Toh stumbled upon actuarial science at a London career fair, where two actuaries convinced her she could turn her love for puzzles into real-world problem-solving in finance and risk. 'Being an actuary isn't just about numbers. It's about understanding risk, making ethical decisions and translating technical knowledge into real-world solutions,' she said. Now in her mid-50s, Toh is a general insurance actuary and consultant, serving as the appointed actuary for several international insurers in Australia and New Zealand. Her work spans financial condition reports, reserving and pricing assessments, reinsurance reviews and regulatory compliance. She also tackles emerging areas such as climate risk, social welfare modelling and cyber resilience — where actuaries help governments predict how investments in education or health could offset future costs in justice or corrections. Malaysian strengths While based between Australia and New Zealand, Toh remains a strong advocate of Malaysia's academic strengths, especially in mathematics. 'When I arrived overseas, I was way ahead of everyone else in maths. In Malaysia, you're taught to treat maths like breathing — it's not about being good or bad, you just do it,' she said. Toh described Malaysians as 'natural actuaries' who thrive on diversity, adapt quickly and bring multiple perspectives to problem-solving. 'We're no longer just number crunchers. We're in the boardroom, advising governments, modelling disaster response and working with tech companies,' she said. WIn Li Toh comes back often and Malaysia is never far from her heart. She loves assam laksa and more and makes it a point to hit her favourite spots in Ipoh when she's visiting or working. — Picture by Sayuti Zanudin Deep roots, global reach Despite her international career, Toh's ties to Ipoh remain strong. She fondly recalls school band rehearsals, taekwondo, tennis at Ipoh Swimming Club and late-night study sessions. 'I still speak Malay and Chinese. The Padang Ipoh, the FMS Bar — the same waiters are still there. And there's a food revolution with Michelin-rated restaurants and fusion cafés run by young people. I love it,' she said. Toh is a mother of 20-year-old twins, both studying engineering in Sydney. She sees the actuarial profession as expanding far beyond its traditional scope. 'It's no longer just about pensions and insurance. We're involved in public policy, social welfare and climate change economics. My goal is to help people understand that actuaries are not just number crunchers — we're advisors, policy thinkers and problem solvers,' she said. Her advice to Malaysians: 'Don't let anything stop you. You don't have to come from privilege. Stay curious and embrace challenges. If you love maths and puzzles, this could be your path too.' Before flying back to Australia, Toh has one last item on her to-do list. 'Get a good roti canai. Maybe some soup noodles too. That's non-negotiable,' she said with a smile.
Yahoo
5 minutes ago
- Yahoo
13 Surprising Companies Jeff Bezos Bet On
When one of the world's wealthiest individuals makes an investment, it's worth paying attention. As the fourth richest person in the world with a net worth of $244.5 billion, Amazon founder Jeff Bezos is one such person whose strategy is worth taking note of. Discover More: For You: Since stepping down as Amazon CEO in 2021, Bezos has turned his focus to ventures like Blue Origin, but his investment footprint spans far beyond rockets and retail. Bezos has built a wide-ranging portfolio through Amazon, his venture capital firm Bezos Expeditions, Nash Holdings LLC and the Bezos Family Foundation. From fintech and AI to agriculture and education, Bezos has backed companies that are shaping the future of technology, business and society. Check out the 13 surprising companies Jeff Bezos has invested in that might be worth a spot in your watchlist too. EverFi In April 2017, Bezos invested $190 million from his cash flow during a Series D funding round for EverFi. The educational technology company focuses on financial education, social and emotional learning and STEM and career readiness, among other offerings. According to the EverFi website, the company is 'fulfilling the need for scalable education in an ever-changing world.' Blackbaud, a cloud software giant, acquired EverFi for $750 million in 2022, and it's unknown if Bezos has any involvement at this point. NextDoor During Series B funding in 2013, Bezos Expeditions followed super-investor David Sze with an investment in the private social media app, Nextdoor. This free app connects people who live in the same community and provides access to posts about neighborhood safety, jobs, lost pets and local politics. NextDoor was acquired by Khosla Ventures Acquisition Co. II, a special-purpose acquisition company, in 2024. The current share price as of July 25, 2025, is $1.88, with a market cap of $719.27 million. Read Next: Plenty In July of 2017, Bezos Expeditions invested in the future of food. Plenty is an agriculture technology company that develops plant sciences for crops to flourish in a pesticide and GMO-free environment. The ag-tech company received a $200 million investment from Bezos Expeditions during its Series B funding. Plenty has raised a total of $941 million in funding over seven rounds. Their vertical farms grow veggies indoors, using only 1% of the water used in traditional agriculture, and produce crop yields up to 350 times greater than traditional methods. Airbnb The extremely popular accommodation marketplace provides access to millions of unique places to stay in more than 100,000 cities and 220 countries, and it received a Bezos investment of $112 million, according to a Visual Capitalist report. Airbnb priced its IPO at $68 per share in December 2020, giving it a $47 billion valuation, which indicated that Bezos would earn a decent payday. Currently, shares are trading at $141.31, and it has a market capitalization of over $87.22 billion. Grail Bezos appears to be trying to make the world a better place by supporting companies like Grail, a healthcare company focusing on detecting cancer early before treatments become too invasive. In 2016, Bezos Expeditions invested $100 million in Grail. Grail raised over $2 billion in funding and announced an IPO in September 2020, but just one week later, Illumina announced it'd buy the company for $8 billion and that Bezos would be bought out. Mark43 Bezos Expeditions invested $27 million in Series B financing for Mark43 in April 2016. Bezos was also part of the $38 million Mark43 secured in its Series C round of funding. Mark43, founded in 2012, aims to improve public safety software. Amazon Web Services — Amazon's secure cloud computing space — provides Mark43 support for its large criminal justice information security workloads. Fundbox This fintech company is helping people grow their small businesses by making access to credit simple, secure, fast and transparent. In September 2015, Fundbox was given $50 million by Bezos Expeditions and Spark Capital Growth in a Series C funding round. Remitly Remitly is a mobile digital payment app that lets users transfer money across Remitly's proprietary global network, which spans Africa, Asia, Central Europe and South America. Bezos was an early investor through Bezos Expeditions. Though it's no Amazon stock, the current share price for Remitly is $16.98, and the company has a market cap of $3.46 billion. Wall Street analysts believe that shares could shoot up in the short term as there is optimism over potential earnings growth. Uber Back in 2011, Bezos invested $37 million in Uber's Series B funding round. The popular ride-sharing and food delivery app went public in 2019 at $45 per share, valuing the company at $82.4 billion. As of July 25, 2025, the stock is trading at $91.29 a share and has a market cap of $190.9 billion. Domo In 2013, Bezos invested $60 million in Domo, a company connecting CEOs to their front-line employees with access to real-time data and insights, allowing them to manage the business from their smartphones. Domo priced its IPO at $21 per share in 2018, raising $193 million. As of July 25, 2025, the stock trades at $15.96 per share, giving it a market cap of $643.15 million. It's worth noting that the cloud-based software company experienced a slowdown in 2023, and it's unclear whether Bezos is still involved as of 2025. Stack Overflow Stack Overflow operates a public community platform where developers can ask and answer questions about coding. Additional products include several other tools that help companies overcome tech challenges. With over 23 million registered users and over 100 million monthly visitors, Stack Overflow is one of the world's most popular websites. Bezos was an early investor through Bezos Expeditions, which went on to fund at least one additional round of financing. However, Stack Overflow was sold for $1.8 billion to Prosus in 2021, and whether Bezos is still involved is unknown. The popular question-and-answer website is trying to utilize the power of AI, and it has integrated generative AI into its platform. Figure AI With the rise in prominence of AI-powered tools, Bezos Expeditions started focusing on this field. Last year, Bezos Expeditions, along with Nvidia and Microsoft, participated in a funding round for Figure AI to help raise $675 million at a $2.6 billion valuation. Bezos pledged $100 million. The startup is working on building a humanoid robot that can perform undesirable jobs, available for commercial use. Analysts from Goldman Sachs predict the humanoid robot market could hit $38 billion by 2035, potentially disrupting the labor market. Perplexity AI Bezos Expeditions invested in the $73.6 million Series B round for Perplexity AI and the follow-on round of $63 million in 2024 as the company's valuation climbed to between $2.5 billion and $3 billion. The AI-powered search engine relies on language models to provide results. The alternative search engine claims to provide more accurate results with a chatbot-style interface. Caitlyn Moorhead contributed to the reporting for this article. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 4 Affordable Car Brands You Won't Regret Buying in 2025 Here's the Minimum Salary Required To Be Considered Upper Class in 2025 This article originally appeared on 13 Surprising Companies Jeff Bezos Bet On
Yahoo
5 minutes ago
- Yahoo
Insider Spends AU$500k Buying More Shares In Resource Minerals International
Potential Resource Minerals International Ltd (ASX:RMI) shareholders may wish to note that the Executive Chairman, Asimwe Matungwa Kabunga, recently bought AU$500k worth of stock, paying AU$0.021 for each share. That's a very solid buy in our book, and increased their holding by a noteworthy 17%. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Resource Minerals International Insider Transactions Over The Last Year In fact, the recent purchase by Asimwe Matungwa Kabunga was the biggest purchase of Resource Minerals International shares made by an insider individual in the last twelve months, according to our records. That means that an insider was happy to buy shares at above the current price of AU$0.018. Their view may have changed since then, but at least it shows they felt optimistic at the time. To us, it's very important to consider the price insiders pay for shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price. Resource Minerals International insiders may have bought shares in the last year, but they didn't sell any. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below! See our latest analysis for Resource Minerals International There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them). Does Resource Minerals International Boast High Insider Ownership? Many investors like to check how much of a company is owned by insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that Resource Minerals International insiders own 39% of the company, worth about AU$5.4m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders. So What Does This Data Suggest About Resource Minerals International Insiders? The recent insider purchases are heartening. And the longer term insider transactions also give us confidence. But we don't feel the same about the fact the company is making losses. Given that insiders also own a fair bit of Resource Minerals International we think they are probably pretty confident of a bright future. While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Every company has risks, and we've spotted 5 warning signs for Resource Minerals International (of which 4 are a bit concerning!) you should know about. But note: Resource Minerals International may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
