Yahoo Finance Is It Too Late To Consider Buying Martinrea International Inc (TSE:MRE)?
Martinrea International Inc (TSE:MRE), which is in the auto components business, and is based in Canada, saw significant share price volatility over the past couple of months on the TSX, rising to the highs of CA$14.57 and falling to the lows of CA$11.89. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Martinrea International’s current trading price of CA$11.89 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 Martinrea International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Martinrea International
What’s the opportunity in Martinrea International?
Good news, investors! Martinrea International is still a bargain right now. My valuation model shows that the intrinsic value for the stock is CA$21.18, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Martinrea International’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.
What does the future of Martinrea International 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. 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. Martinrea International’s earnings over the next few years are expected to increase by 30%, 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? Since MRE is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 financial health to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MRE 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 MRE. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Martinrea International. You can find everything you need to know about Martinrea International in the latest infographic research report. If you are no longer interested in Martinrea International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
