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Animalcare Group plc (LON:ANCR), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the AIM. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Animalcare Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Animalcare Group
What's the opportunity in Animalcare Group?
Good news, investors! Animalcare Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is £5.63, but it is currently trading at UK£3.40 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Animalcare Group’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will Animalcare Group 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. Animalcare Group'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? Since ANCR is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on ANCR for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ANCR. 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 buy.