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While Travis Perkins plc (LON:TPK) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£9.60 and falling to the lows of UK£7.12. 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 Travis Perkins' current trading price of UK£7.12 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 Travis Perkins’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 Travis Perkins
What Is Travis Perkins Worth?
Good news, investors! Travis Perkins is still a bargain right now. According to our valuation, the intrinsic value for the stock is £9.87, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Travis Perkins’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.
Can we expect growth from Travis Perkins?
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. Though in the case of Travis Perkins, it is expected to deliver a relatively unexciting top-line growth of 6.3% in the next few years, 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 TPK is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on TPK 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 TPK. 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 investment decision.