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While The Berkeley Group Holdings plc (LON:BKG) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£55.24 and falling to the lows of UK£42.18. 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 Berkeley Group Holdings' current trading price of UK£42.18 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Berkeley Group Holdings’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 Berkeley Group Holdings
Is Berkeley Group Holdings Still Cheap?
According to our valuation model, Berkeley Group Holdings seems to be fairly priced at around 8.10% above our intrinsic value, which means if you buy Berkeley Group Holdings today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth £39.02, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Berkeley Group Holdings’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.
Can we expect growth from Berkeley Group Holdings?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 Berkeley Group Holdings, it is expected to deliver a negative earnings growth of -15%, 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? BKG seems fairly priced right now, 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.