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Angling Direct PLC (LON:ANG), is not the largest company out there, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£0.32 and falling to the lows of UK£0.25. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Angling Direct's current trading price of UK£0.25 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Angling Direct’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Angling Direct
Is Angling Direct Still Cheap?
Angling Direct is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 17.87x is currently well-above the industry average of 9.73x, meaning that it is trading at a more expensive price relative to its peers. But, is there another opportunity to buy low in the future? Given that Angling Direct’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of Angling Direct 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. 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 relatively muted revenue growth of 5.9% expected in the upcoming year, short term growth doesn’t seem like a key driver for a buy decision for Angling Direct.
What This Means For You
Are you a shareholder? ANG’s future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe ANG should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.