Yahoo Finance When Should You Buy Applegreen plc (LON:APGN)?
Applegreen plc (LON:APGN), a specialty retail company based in Ireland, saw a decent share price growth in the teens level on the AIM over the last few months. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine Applegreen’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. See our latest analysis for Applegreen
What’s the opportunity in Applegreen?
Applegreen appears to be overvalued by 29.29% at the moment, based on my discounted cash flow valuation. The stock is currently priced at UK£5.59 on the market compared to my intrinsic value of £4.32. Not the best news for investors looking to buy! Another thing to keep in mind is that Applegreen’s share price is 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 does the future of Applegreen look like?
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. 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. Applegreen’s earnings over the next few years are expected to increase by 70.84%, 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 well and truly priced in APGN’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe APGN should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on APGN for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for APGN, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Applegreen. You can find everything you need to know about Applegreen in the latest infographic research report. If you are no longer interested in Applegreen, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
