Yahoo Finance Is There Now An Opportunity In SSE plc (LSE:SSE)?
Let's talk about the popular SSE plc (LSE:SSE). The company's shares See our latest analysis for SSE
Is SSE still cheap?
According to my valuation model, the stock is currently overvalued by about 32%, trading at £14.38 compared to my intrinsic value of £9.77. This means that the buying opportunity has probably disappeared for now. In addition to this, it seems like SSE’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because SSE’s stock is less volatile than the wider market given its low beta.
What kind of growth will SSE generate?
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 SSE future expectations. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for SSE, at least in the near future.
What this means for you:
Are you a shareholder? If you believe SSE 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. Given the uncertainty from negative growth in the future, this could be the right time to reduce your total portfolio risk. 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 SSE for some time, now may not be the best time to enter into the stock. Its price has risen beyond its true value, on top of a negative future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on SSE. You can find everything you need to know about SSE in the latest infographic research report. If you are no longer interested in SSE, 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.
