Why Booker Group PLC (LON:BOK) Could Be A Buy
Booker Group PLC (LSE:BOK), a consumer retailing company based in United Kingdom, saw a decent share price growth in the teens level on the LSE over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Booker Group’s outlook and valuation to see if the opportunity still exists. View our latest analysis for Booker Group
What’s the opportunity in Booker Group?
The stock is currently trading at £2.25 on the share market, which means it is overvalued by 48% compared to my intrinsic value of £1.52. This means that the buying opportunity has probably disappeared for now. Furthermore, Booker Group’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Booker Group look like?
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 relatively muted revenue growth of 3.66% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Booker Group, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in Booker Group’s future outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe Booker Group 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 Booker Group 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 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 Booker Group. You can find everything you need to know about Booker Group in the latest infographic research report. If you are no longer interested in Booker Group, 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.
