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While The Berkeley Group Holdings plc (LON:BKG) might not have the largest market cap around , it saw a decent share price growth of 16% on the LSE over the last few months. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Berkeley Group Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.
View our latest analysis for Berkeley Group Holdings
What's The Opportunity In Berkeley Group Holdings?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 8.96% above our intrinsic value, which means if you buy Berkeley Group Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £48.46, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Berkeley Group Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from Berkeley Group Holdings?
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 -13% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Berkeley Group Holdings. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, BKG 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 de-risk your portfolio. Is your current exposure to the stock optimal 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.