In This Article:
Manitou BF SA (EPA:MTU), which is in the machinery business, and is based in France, saw a decent share price growth in the teens level on the ENXTPA over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Manitou BF’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for Manitou BF
Is Manitou BF still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.28% above my intrinsic value, which means if you buy Manitou BF today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth €15.86, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Manitou BF’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Manitou BF generate?
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. 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. However, with a negative profit growth of -8.7% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Manitou BF. This certainty tips the risk-return scale towards higher risk.
What this means for you:
Are you a shareholder? Currently, MTU 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 reduce the risk in 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 MTU for a while, now may not be the most optimal 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. Furthermore, 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 MTU should the price fluctuate below its true value.