What Is Ampco-Pittsburgh Corporation’s (NYSE:AP) Share Price Doing?
Ampco-Pittsburgh Corporation (NYSE:AP), a metals and mining company based in United States, received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $18.3 at one point, and dropping to the lows of $12.55. 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 Ampco-Pittsburgh’s current trading price of $12.55 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 Ampco-Pittsburgh’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for Ampco-Pittsburgh
What is Ampco-Pittsburgh worth?
According to my relative valuation model, the stock seems to be currently fairly priced. In this instance, I’ve used the price-to-book (PB) ratio given that there is not enough information to reliably forecast the stock’s cash flows, and its earnings doesn’t seem to reflect its true value. I find that Ampco-Pittsburgh’s ratio of 1.02x is trading slightly below its industry peers’ ratio of 1.27x, which means if you buy Ampco-Pittsburgh today, you’d be paying a relatively reasonable price for it. And if you believe that Ampco-Pittsburgh should be trading at this level in the long run, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Ampco-Pittsburgh’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 Ampco-Pittsburgh?
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 the company’s future expectations. Ampco-Pittsburgh’s revenue growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. Unless expenses grow at the same level, or higher, this top-line growth should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in Ampco-Pittsburgh’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 financial strength of the company. Have these factors changed since the last time you looked at Ampco-Pittsburgh? 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 an eye on Ampco-Pittsburgh, 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 Ampco-Pittsburgh, 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 Ampco-Pittsburgh. You can find everything you need to know about Ampco-Pittsburgh in the latest infographic research report. If you are no longer interested in Ampco-Pittsburgh, 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.
