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Is Now The Time To Look At Buying Altra Industrial Motion Corp. (NASDAQ:AIMC)?

Simply Wall St

Altra Industrial Motion Corp. (NASDAQ:AIMC), which is in the machinery business, and is based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a small cap stock, which tends to lack high analyst coverage, 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 examine Altra Industrial Motion’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Altra Industrial Motion

What's the opportunity in Altra Industrial Motion?

Great news for investors – Altra Industrial Motion is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $34.83, but it is currently trading at US$26.45 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Altra Industrial Motion’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.

Can we expect growth from Altra Industrial Motion?

NasdaqGS:AIMC Past and Future Earnings, October 12th 2019

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. With profit expected to more than double in the upcoming, the future appears to be extremely bright for Altra Industrial Motion. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? Since AIMC is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on AIMC for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy AIMC. 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 buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Altra Industrial Motion. You can find everything you need to know about Altra Industrial Motion in the latest infographic research report. If you are no longer interested in Altra Industrial Motion, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.