Yahoo Finance Is Now The Time To Look At Buying Maxim Integrated Products, Inc. (NASDAQ:MXIM)?
Today we're going to take a look at the well-established Maxim Integrated Products, Inc. (NASDAQ:MXIM). The company's stock led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a large-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, what if the stock is still a bargain? Let’s take a look at Maxim Integrated Products’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Maxim Integrated Products
Is Maxim Integrated Products still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.6% below my intrinsic value, which means if you buy Maxim Integrated Products today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $58.70, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Maxim Integrated Products’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 Maxim Integrated Products?
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. Though in the case of Maxim Integrated Products, it is expected to deliver a negative earnings growth of -19%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, MXIM 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 an eye on MXIM for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears 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 gel your views on MXIM should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Maxim Integrated Products. You can find everything you need to know about Maxim Integrated Products in the latest infographic research report. If you are no longer interested in Maxim Integrated Products, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
