Why RBC Bearings Incorporated (NYSE:RBC) Could Be Worth Watching
RBC Bearings Incorporated (NYSE:RBC), is not the largest company out there, but it saw significant share price movement during recent months on the NYSE, rising to highs of US$286 and falling to the lows of US$258. 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 RBC Bearings' current trading price of US$265 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at RBC Bearings’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 RBC Bearings
What's The Opportunity In RBC Bearings?
The stock is currently trading at US$265 on the share market, which means it is overvalued by 22% compared to our intrinsic value of $217.07. This means that the opportunity to buy RBC Bearings at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that RBC Bearings’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.
What does the future of RBC Bearings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 26% over the next year, the near-term future seems bright for RBC Bearings. 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? It seems like the market has well and truly priced in RBC’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 RBC 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 RBC 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 optimistic prospect is encouraging for RBC, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 1 warning sign for RBC Bearings you should be aware of.
If you are no longer interested in RBC Bearings, 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.
