Should You Buy Oshkosh Corporation (OSK) At $87.91?
Oshkosh Corporation (NYSE:OSK), a machinery company based in United States, saw a decent share price growth in the teens level on the NYSE over the last few months. 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? Today I will analyse the most recent data on OSK’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Oshkosh
Is OSK still cheap?
OSK appears to be overvalued by 22% at the moment, based on my discounted cash flow valuation. The stock is currently priced at $87.91 on the market compared to my intrinsic value of $72.17. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since OSK’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much OSK moves relative to the rest of the market.
What does the future of OSK look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. OSK’s earnings over the next few years are expected to increase by 45.30%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in OSK’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe OSK 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 OSK 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 optimistic prospect is encouraging for OSK, 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 Oshkosh. You can find everything you need to know about OSK in the latest infographic research report. If you are no longer interested in Oshkosh, 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.
