Materion Corporation (NYSE:MTRN), a metals and mining company based in United States, led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on MTRN’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Materion
What is MTRN worth?
MTRN appears to be overvalued by 36% at the moment, based on my discounted cash flow valuation. The stock is currently priced at $49.95 on the market compared to my intrinsic value of $36.79. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since MTRN’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much MTRN moves relative to the rest of the market.
Can we expect growth from MTRN?
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. With profit expected to grow by 35.96% over the next year, the near-term future seems bright for MTRN. 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? It seems like the market has well and truly priced in MTRN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MTRN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on MTRN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MTRN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Materion. You can find everything you need to know about MTRN in the latest infographic research report. If you are no longer interested in Materion, 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.