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Is It Time To Consider Buying Stanley Black & Decker, Inc. (NYSE:SWK)?

Kelly Murphy

Let’s talk about the popular Stanley Black & Decker, Inc. (NYSE:SWK). The company’s shares saw significant share price movement during recent months on the NYSE, rising to highs of $136.88 and falling to the lows of $108.45. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Stanley Black & Decker’s current trading price of $118.55 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Stanley Black & Decker’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Stanley Black & Decker

What’s the opportunity in Stanley Black & Decker?

According to my valuation model, Stanley Black & Decker seems to be fairly priced at around 13.6% above my intrinsic value, which means if you buy Stanley Black & Decker today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $104.35, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Stanley Black & Decker’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Stanley Black & Decker?

NYSE:SWK Future Profit January 24th 19

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. With profit expected to more than double over the next couple of years, the future seems bright for Stanley Black & Decker. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? SWK’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on SWK, 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.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Stanley Black & Decker. You can find everything you need to know about Stanley Black & Decker in the latest infographic research report. If you are no longer interested in Stanley Black & Decker, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.