Is James Fisher and Sons plc (LON:FSJ) Potentially Undervalued?

While James Fisher and Sons plc (LON:FSJ) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£14.22 at one point, and dropping to the lows of UK£11.04. 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 James Fisher and Sons' current trading price of UK£11.16 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 James Fisher and Sons’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for James Fisher and Sons

What is James Fisher and Sons worth?

Good news, investors! James Fisher and Sons is still a bargain right now. According to my valuation, the intrinsic value for the stock is £14.07, but it is currently trading at UK£11.16 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because James Fisher and Sons’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from James Fisher and Sons?

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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. James Fisher and Sons’s earnings over the next few years are expected to increase by 30%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since FSJ is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on FSJ 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 FSJ. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing James Fisher and Sons at this point in time. In terms of investment risks, we've identified 2 warning signs with James Fisher and Sons, and understanding these should be part of your investment process.

If you are no longer interested in James Fisher and Sons, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. 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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