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Oxford Instruments plc (LON:OXIG), is not the largest company out there, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£21.65 at one point, and dropping to the lows of UK£15.00. 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 Oxford Instruments' current trading price of UK£15.82 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 Oxford Instruments’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Oxford Instruments Still Cheap?
The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.5% below our intrinsic value, which means if you buy Oxford Instruments today, you’d be paying a reasonable price for it. And if you believe the company’s true value is £16.92, then there’s not much of an upside to gain from mispricing. What's more, Oxford Instruments’s share price may be more stable over time (relative to the market), as indicated by its low beta.
View our latest analysis for Oxford Instruments
What does the future of Oxford Instruments look like?
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. Oxford Instruments' earnings over the next few years are expected to increase by 26%, 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? It seems like the market has already priced in OXIG’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on OXIG, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.