Yahoo Finance At AU$01.34, Is It Time To Buy Australian Pharmaceutical Industries Limited (ASX:API)?
Australian Pharmaceutical Industries Limited (ASX:API), a healthcare company based in Australia, saw significant share price volatility over the past couple of months on the ASX, rising to the highs of A$1.56 and falling to the lows of A$1.24. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Australian Pharmaceutical Industries’s current trading price of A$1.34 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Australian Pharmaceutical Industries’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Australian Pharmaceutical Industries
What’s the opportunity in Australian Pharmaceutical Industries?
Good news, investors! Australian Pharmaceutical Industries is still a bargain right now. My valuation model shows that the intrinsic value for the stock is A$2.76, but it is currently trading at AU$1.34 on the share market, meaning that there is still an opportunity to buy now. Australian Pharmaceutical Industries’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 Australian Pharmaceutical Industries 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. Australian Pharmaceutical Industries’s earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since API is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on API for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy API. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Australian Pharmaceutical Industries. You can find everything you need to know about Australian Pharmaceutical Industries in the latest infographic research report. If you are no longer interested in Australian Pharmaceutical Industries, 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.
