At £4.634, Is PageGroup plc (LON:PAGE) A Buy?
PageGroup plc (LSE:PAGE), a professional services company based in United Kingdom, received a lot of attention from a substantial price movement on the LSE in the over the last few months, increasing to £5.26 at one point, and dropping to the lows of £4.41. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether PageGroup’s current trading price of £4.63 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at PageGroup’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for PageGroup
What’s the opportunity in PageGroup?
According to my valuation model, PageGroup seems to be fairly priced at around 9% above my intrinsic value, which means if you buy PageGroup today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is £4.25, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since PageGroup’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from PageGroup?
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. 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. With profit expected to grow by a double-digit 17.85% over the next couple of years, the outlook is positive for PageGroup. 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? PageGroup’s optimistic 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 the stock? 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 PageGroup, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on PageGroup. You can find everything you need to know about PageGroup in the latest infographic research report. If you are no longer interested in PageGroup, 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.
