Is It Time To Buy LSB Industries Inc (LXU)?
LSB Industries Inc (NYSE:LXU), a materials company based in United States, saw a significant share price rise of over 20% in the past couple of months on the NYSE. Less covered, small-stocks like LXU sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could LXU still be trading at a low price relative to its actual value? Let’s take a look at LXU’s outlook and value based on the most recent financial data to see if the opportunity still exists. View our latest analysis for LSB Industries
What's the opportunity in LXU?
Great news for investors – LXU is still trading at a fairly cheap price. My valuation model shows that the stock’s value should be $19.48 but it is currently trading at $7.5 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, LXU’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 LXU moves relative to the rest of the market.
Can we expect growth from LXU?
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 LXU future expectations. With profit expected to grow by 68.22% over the next year, the near-term future seems bright for LXU. It looks like higher cash flows 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 LXU is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on LXU for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy LXU. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, 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 LSB Industries. You can find everything you need to know about LXU in the latest infographic research report. If you are no longer interested in LSB Industries, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
