Is It Time To Consider Buying Masonite International Corporation (NYSE:DOOR)?
Masonite International Corporation (NYSE:DOOR), 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 NYSE. With many analysts covering the mid-cap 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 examine Masonite International’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Masonite International
What's The Opportunity In Masonite International?
Great news for investors – Masonite International is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is $117.15, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Masonite International’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Masonite International?
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. However, with a negative profit growth of -0.8% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Masonite International. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although DOOR is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. I recommend you think about whether you want to increase your portfolio exposure to DOOR, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on DOOR for a while, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
If you'd like to know more about Masonite International as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 2 warning signs with Masonite International, and understanding these should be part of your investment process.
If you are no longer interested in Masonite International, 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.
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