Is Now The Time To Look At Buying Graco Inc. (NYSE:GGG)?
Graco Inc. (NYSE:GGG) saw a decent share price growth of 14% on the NYSE over the last few months. The recent jump in the share price has meant that the company is trading around its 52-week high. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Graco’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Graco
Is Graco Still Cheap?
According to our valuation model, Graco seems to be fairly priced at around 8.8% below our intrinsic value, which means if you buy Graco today, you’d be paying a fair price for it. And if you believe that the stock is really worth $103.72, then there’s not much of an upside to gain from mispricing. What's more, Graco’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from Graco?
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. 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. Graco's earnings over the next few years are expected to increase by 23%, 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? GGG’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on GGG, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Graco, you'd also look into what risks it is currently facing. For example - Graco has 1 warning sign we think you should be aware of.
If you are no longer interested in Graco, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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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.
