Ansell Limited (ASX:ANN), which is in the medical equipment business, and is based in Australia, had a relatively subdued couple of weeks in terms of changes in share price, which continued to float around the range of AU$25.70 to AU$27.94. However, is this the true valuation level of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Ansell’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Ansell still cheap?
According to my valuation model, Ansell seems to be fairly priced at around 3.61% above my intrinsic value, which means if you buy Ansell today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is A$26.78, there’s only an insignificant downside when the price falls to its real value. What’s more, Ansell’s share price may be more stable over time (relative to the market), as indicated by its low beta.
What does the future of Ansell look like?
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. With profit expected to grow by 51% over the next couple of years, the future seems bright for Ansell. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? ANN’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on ANN, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, 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 Ansell. You can find everything you need to know about Ansell in the latest infographic research report. If you are no longer interested in Ansell, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.