Yahoo Finance At AU$12.39, Is Monadelphous Group Limited (ASX:MND) Worth Looking At Closely?
While Monadelphous Group Limited (ASX:MND) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the ASX over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Monadelphous Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Monadelphous Group
What's The Opportunity In Monadelphous Group?
According to my valuation model, Monadelphous Group seems to be fairly priced at around 8.61% above my intrinsic value, which means if you buy Monadelphous Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth A$11.41, 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 Monadelphous Group’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.
What kind of growth will Monadelphous Group generate?
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. 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 92% over the next couple of years, the future seems bright for Monadelphous Group. 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 already priced in MND’s positive outlook, 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 MND, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.
If you want to dive deeper into Monadelphous Group, you'd also look into what risks it is currently facing. Case in point: We've spotted 1 warning sign for Monadelphous Group you should be aware of.
If you are no longer interested in Monadelphous Group, 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.
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