A & J Mucklow Group Plc (LSE:MKLW), a equity real estate investment trusts (reits) 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 £5.25 at one point, and dropping to the lows of £4.72. 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 MKLW’s current trading price of £5 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 MKLW’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 A & J Mucklow Group
What’s the opportunity in MKLW?
MKLW appears to be overvalued by 35% at the moment, based on my discounted cash flow valuation. The stock is currently priced at £5 on the market compared to my intrinsic value of £3.72. Not the best news for investors looking to buy! In addition to this, it seems like MKLW’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because MKLW’s stock is less volatile than the wider market given its low beta.
What kind of growth will MKLW generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 MKLW future expectations. However, with a relatively muted revenue growth of 3.24% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for MKLW, at least in the short term.
What this means for you:
Are you a shareholder? MKLW’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe MKLW should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on MKLW for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MKLW, which means 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 A & J Mucklow Group. You can find everything you need to know about MKLW in the latest infographic research report. If you are no longer interested in A & J Mucklow Group, 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.