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While Topps Tiles Plc (LON:TPT) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the LSE, rising to highs of UK£0.53 and falling to the lows of UK£0.45. 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 Topps Tiles' current trading price of UK£0.47 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 Topps Tiles’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 Topps Tiles
Is Topps Tiles Still Cheap?
Great news for investors – Topps Tiles is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £0.77, but it is currently trading at UK£0.47 on the share market, meaning that there is still an opportunity to buy now. However, given that Topps Tiles’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 kind of growth will Topps Tiles 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. Though in the case of Topps Tiles, it is expected to deliver a relatively unexciting earnings growth of 8.9%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since TPT is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on TPT for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy TPT. 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 buy.