Yahoo Finance At UK£0.70, Is M.T.I Wireless Edge Ltd. (LON:MWE) Worth Looking At Closely?
M.T.I Wireless Edge Ltd. (LON:MWE), is not the largest company out there, but it saw a decent share price growth in the teens level on the AIM over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on M.T.I Wireless Edge’s outlook and valuation to see if the opportunity still exists.
See our latest analysis for M.T.I Wireless Edge
What is M.T.I Wireless Edge worth?
According to my valuation model, M.T.I Wireless Edge seems to be fairly priced at around 2.60% above my intrinsic value, which means if you buy M.T.I Wireless Edge today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £0.69, then there isn’t really any room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since M.T.I Wireless Edge’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of M.T.I Wireless Edge 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 relatively muted revenue growth of 6.7% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for M.T.I Wireless Edge.
What this means for you:
Are you a shareholder? MWE’s future growth appears to have been factored into the current share price, 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 tabs on MWE, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that M.T.I Wireless Edge has 4 warning signs and it would be unwise to ignore these.
If you are no longer interested in M.T.I Wireless Edge, 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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