Yahoo Finance Is Now An Opportune Moment To Examine Howden Joinery Group Plc (LON:HWDN)?
Howden Joinery Group Plc (LON:HWDN), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. 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. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Howden Joinery Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Howden Joinery Group
Is Howden Joinery Group Still Cheap?
According to my valuation model, Howden Joinery Group seems to be fairly priced at around 9.38% above my intrinsic value, which means if you buy Howden Joinery Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £5.20, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Howden Joinery Group’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Howden Joinery Group look like?
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. However, with a negative profit growth of -14% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Howden Joinery Group. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, HWDN appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on HWDN for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on HWDN should the price fluctuate below its true value.
If you'd like to know more about Howden Joinery Group as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 2 warning signs (1 is concerning!) that you ought to be aware of before buying any shares in Howden Joinery Group.
If you are no longer interested in Howden Joinery Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
