Should You Buy The Buckle Inc (NYSE:BKE)?
The Buckle Inc (NYSE:BKE), a specialty retail company based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on Buckle’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Buckle
Is Buckle still cheap?
According to my valuation model, Buckle seems to be fairly priced at around 7% above my intrinsic value, which means if you buy Buckle today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $25.32, there’s only an insignificant downside when the price falls to its real value. Furthermore, it seems like Buckle’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 does the future of Buckle 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. 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. Though in the case of Buckle, it is expected to deliver a relatively unexciting earnings growth of 0.10%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Buckle, at least in the near term.
What this means for you:
Are you a shareholder? BKE’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 the stock? 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 BKE, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 Buckle. You can find everything you need to know about Buckle in the latest infographic research report. If you are no longer interested in Buckle, 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.
