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Liberty Global Ltd. (NASDAQ:LBTY.A), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$13.12 at one point, and dropping to the lows of US$10.95. 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 Liberty Global's current trading price of US$11.55 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 Liberty Global’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Liberty Global?
Great news for investors – Liberty Global is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’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 2.22x is currently well-below the industry average of 10.52x, meaning that it is trading at a cheaper price relative to its peers. However, given that Liberty Global’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.
See our latest analysis for Liberty Global
Can we expect growth from Liberty Global?
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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Liberty Global, at least in the near future.
What This Means For You
Are you a shareholder? Although LBTY.A is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to LBTY.A, or whether diversifying into another stock may be a better move for your total risk and return.