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Young & Co.'s Brewery, P.L.C. (LON:YNGA), might not be a large cap stock, but it saw significant share price movement during recent months on the AIM, rising to highs of UK£10.50 and falling to the lows of UK£9.46. 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 Young's Brewery's current trading price of UK£9.64 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 Young's Brewery’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Young's Brewery
What Is Young's Brewery Worth?
According to our valuation model, Young's Brewery seems to be fairly priced at around 12% below our intrinsic value, which means if you buy Young's Brewery today, you’d be paying a fair price for it. And if you believe that the stock is really worth £10.92, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Young's Brewery’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will Young's Brewery generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Young's Brewery's earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? YNGA’s optimistic future growth appears to have been factored into the current share price, 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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on YNGA, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.