At £2.275, Is Findel plc (LON:FDL) A Buy?
Findel plc (LSE:FDL), a online retail company based in United Kingdom, saw a double-digit share price rise of over 10% in the past couple of months on the LSE. With many analysts covering the 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 take a look at Findel’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for Findel
Is Findel still cheap?
The stock seems fairly valued at the moment according to my relative valuation model. I’ve used the price-to-book ratio in this instance because there’s not enough visibility to forecast its cash flows, and its earnings doesn’t seem to reflect its true value. The stock’s ratio of 8.29x is currently trading slightly above its industry peers’ ratio of 7.09x, which means if you buy Findel today, you’d be paying a relatively reasonable price for it. And if you believe that Findel should be trading at this level in the long run, there’s only an insignificant downside when the price falls to its real value. Furthermore, it seems like Findel’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Findel 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. However, with a relatively muted revenue growth of 9.98% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Findel, at least in the short term.
What this means for you:
Are you a shareholder? FDL’s future growth appears to have been factored into the current share price, with shares trading around its fair value. 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 FDL? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on FDL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive growth outlook may mean it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Findel. You can find everything you need to know about Findel in the latest infographic research report. If you are no longer interested in Findel, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
