There's a famous quote that value investing legend Ben Graham made about share price movements. He said:
In the short run, the market is a voting machine but in the long run, it is a weighing machine.
Graham is saying that in the near term, the prices of financial assets, such as ASX 300 shares, are influenced by the whims and emotions of investors. They cast their votes in a ballot box by buying or selling a company's shares based on their current beliefs regarding its future potential.
However, in the long run, the valuation of an ASX share will ultimately be judged by its earnings, cash flow, and dividend payments. In this sense, it operates like a weighing scale, where the company's fundamental characteristics act as the weights that determine its true value.
One ASX 300 stock that is not faring well in the ballot boxes right now is APM Human Services International Ltd (ASX: APM).
Since the start of the year, the APM share price has lost 18% of its value. Things are even worse on a 12-month basis, with this ASX 300 stock losing 40% of its value, as you can see on the chart below.
Is this ASX 300 stock a bargain buy?
While its decline over the last 12 months has been bitterly disappointing for shareholders, it could have created a buying opportunity for the rest of us.
That's the view of analysts at Goldman Sachs, which believe the shares of the provider of health and human services could more than double in value from current levels.
According to a recent note, the broker has a buy rating and $4.10 price target on its shares. Based on the current APM share price of $1.96, this implies potential upside of 110% for investors.
In addition, the broker is expecting dividends per share of 11 cents in FY 2023 and 12 cents in FY 2024. This represents yields of 5.6% and 6.1%, respectively.
Unsurprisingly, given the above, Goldman believes the value on offer with this ASX 300 stock is compelling. It commented:
We believe the current share price presents a compelling opportunity. At ~11x FY23E P/E, APM is now trading at deep discount to global peer Maximus (MMS.US (Not Covered), 22x PE FY23 Bloomberg Consensus EPS). Ironically APM has de-rated significantly over the last quarter vs MMS despite the fact APM continues to grow its exposure in North America, with optionality for growth in disability, age care and new geographies.
