What Does Johnston Press plc’s (LON:JPR) Share Price Indicate?
Johnston Press plc (LSE:JPR), a media company based in United Kingdom, saw a decent share price growth in the teens level on the LSE over the last few months. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Johnston Press’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Johnston Press
What is Johnston Press worth?
Good news, investors! Johnston Press is still a bargain right now. My valuation model shows that the intrinsic value for the stock is £0.88, but it is currently trading at UK£0.10 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Johnston Press’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What does the future of Johnston Press 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. However, with an expected decline of -12.10% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Johnston Press. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Although JPR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to JPR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping tabs on JPR for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Johnston Press. You can find everything you need to know about Johnston Press in the latest infographic research report. If you are no longer interested in Johnston Press, 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.
