Is Now The Time To Look At Buying TT Electronics plc (LON:TTG)?
TT Electronics plc (LON:TTG), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at TT Electronics’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for TT Electronics
What Is TT Electronics Worth?
According to our valuation model, TT Electronics seems to be fairly priced at around 10% below our intrinsic value, which means if you buy TT Electronics today, you’d be paying a fair price for it. And if you believe that the stock is really worth £1.73, then there’s not much of an upside to gain from mispricing. What's more, TT Electronics’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from TT Electronics?
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. However, with an expected decline of -6.0% in revenues over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for TT Electronics. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, TTG appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on TTG for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on TTG should the price fluctuate below its true value.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Be aware that TT Electronics is showing 2 warning signs in our investment analysis and 1 of those is a bit concerning...
If you are no longer interested in TT Electronics, 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.
