Morgan Sindall Group plc (LON:MGNS), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The recent share price gains has brought the company back closer to its yearly peak. 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, could the stock still be trading at a relatively cheap price? Let’s examine Morgan Sindall Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Morgan Sindall Group
Is Morgan Sindall Group Still Cheap?
Great news for investors – Morgan Sindall Group is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is £35.29, but it is currently trading at UK£22.95 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Morgan Sindall Group’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.
Can we expect growth from Morgan Sindall Group?
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 Morgan Sindall Group, it is expected to deliver a relatively unexciting earnings growth of 9.2%, 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 MGNS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 MGNS for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MGNS. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.
So while earnings quality is important, it’s equally important to consider the risks facing Morgan Sindall Group at this point in time. Every company has risks, and we’ve spotted 1 warning sign for Morgan Sindall Group you should know about.
If you are no longer interested in Morgan Sindall Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
