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Flowtech Fluidpower plc (AIM:FLO), a trade distributors company based in United Kingdom, received a lot of attention from a substantial price movement on the AIM in the over the last few months, increasing to £1.95 at one point, and dropping to the lows of £1.6. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Flowtech Fluidpower’s current trading price of £1.75 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 Flowtech Fluidpower’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for Flowtech Fluidpower
Is Flowtech Fluidpower still cheap?
Great news for investors – Flowtech Fluidpower is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £2.5, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Flowtech Fluidpower’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Flowtech Fluidpower 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. 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. In the upcoming year, Flowtech Fluidpower’s earnings are expected to increase by 59.79%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since FLO is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on FLO for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FLO. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.