At £25.7, Is It Time To Buy Spectris plc (LSE:SXS)?
Spectris plc (LSE:SXS), a electronic equipment, instruments and components 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 mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine SXS’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for Spectris
Is SXS still cheap?
According to my valuation model, SXS seems to be fairly priced at around 18% above my intrinsic value, which means if you buy SXS today, you’d be paying a relatively reasonable price for it. And if you believe SXS’s true value is £21.85, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, SXS’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for SXS to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What does the future of SXS 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 SXS future expectations. With profit expected to more than double over the next couple of years, the future seems bright for SXS. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in SXS’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at SXS? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on SXS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for SXS, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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 Spectris. You can find everything you need to know about SXS in the latest infographic research report. If you are no longer interested in Spectris, 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.
