At US$13.97, Is It Time To Put Superior Group of Companies, Inc. (NASDAQ:SGC) On Your Watch List?
Superior Group of Companies, Inc. (NASDAQ:SGC), is not the largest company out there, but it led the NASDAQGM gainers with a relatively large price hike in the past couple of weeks. The company is inching closer to its yearly highs following the recent share price climb. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s take a look at Superior Group of Companies’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Superior Group of Companies
Is Superior Group of Companies Still Cheap?
Superior Group of Companies appears to be overvalued by 36% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$13.97 on the market compared to our intrinsic value of $10.28. This means that the buying opportunity has probably disappeared for now. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Superior Group of Companies’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 the stock moves relative to the rest of the market.
Can we expect growth from Superior Group of Companies?
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. With profit expected to more than double over the next couple of years, the future seems bright for Superior Group of Companies. 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? SGC’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe SGC 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 an eye on SGC for a while, 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 SGC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
If you want to dive deeper into Superior Group of Companies, you'd also look into what risks it is currently facing. For instance, we've identified 3 warning signs for Superior Group of Companies (1 can't be ignored) you should be familiar with.
If you are no longer interested in Superior Group of Companies, 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.
