Unique Fabricating, Inc. (NYSEMKT:UFAB), which is in the auto components business, and is based in United States, received a lot of attention from a substantial price increase on the AMEX over the last few months. As a small cap stock, hardly covered by any analysts, 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? Let’s take a look at Unique Fabricating’s outlook and value based on the most recent financial data to see if the opportunity still exists.
What is Unique Fabricating worth?
Good news, investors! Unique Fabricating is still a bargain right now. According to my valuation, the intrinsic value for the stock is $7.30, but it is currently trading at US$4.23 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Unique Fabricating’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 does the future of Unique Fabricating 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 Unique Fabricating, it is expected to deliver a relatively unexciting top-line growth of 2.7% 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? Even though growth is relatively muted, since UFAB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on UFAB for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy UFAB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Unique Fabricating. You can find everything you need to know about Unique Fabricating in the latest infographic research report. If you are no longer interested in Unique Fabricating, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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