Today we're going to take a look at the well-established AMETEK, Inc. (NYSE:AME). The company's stock saw significant share price movement during recent months on the NYSE, rising to highs of US$138 and falling to the lows of US$122. 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 AMETEK's current trading price of US$133 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at AMETEK’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What is AMETEK worth?
Good news, investors! AMETEK is still a bargain right now. According to my valuation, the intrinsic value for the stock is $172.64, but it is currently trading at US$133 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because AMETEK’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Can we expect growth from AMETEK?NYSE:AME Earnings and Revenue Growth June 29th 2021
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. AMETEK's earnings over the next few years are expected to increase by 64%, 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 AME 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 AME 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 AME. 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.
In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example - AMETEK has 1 warning sign we think you should be aware of.
If you are no longer interested in AMETEK, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
This article by Simply Wall St is general in nature. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
In This StoryAME
- UK meat industry warns some firms have just five days' CO2 supply
- New Oriental Education & Technology Group (NYSE:EDU) stock falls 12% in past week as one-year earnings and shareholder returns continue downward trend
- This Insider Has Just Sold Shares In C3.ai, Inc. (NYSE:AI)
- Alibaba (NYSE:BABA) can Easily Afford its $15.5 billion Donation to the Common Prosperity Initiative