Is There Now An Opportunity In Strattec Security Corporation (NASDAQ:STRT)?
Strattec Security Corporation (NASDAQ:STRT), might not be a large cap stock, but it saw significant share price movement during recent months on the NASDAQGM, rising to highs of US$24.94 and falling to the lows of US$22.14. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Strattec Security's current trading price of US$22.76 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 Strattec Security’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 Strattec Security
Is Strattec Security Still Cheap?
The stock is currently trading at US$22.76 on the share market, which means it is overvalued by 28% compared to my intrinsic value of $17.76. This means that the opportunity to buy Strattec Security at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Strattec Security’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 the stock moves relative to the rest of the market.
What kind of growth will Strattec Security 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 the company's future expectations. Though in the case of Strattec Security, it is expected to deliver a relatively unexciting top-line growth of 0.2% over the next year, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? STRT’s future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe STRT 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 an eye on STRT for a while, 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 means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 1 warning sign with Strattec Security, and understanding this should be part of your investment process.
If you are no longer interested in Strattec Security, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
