Should You Investigate Reliance Worldwide Corporation Limited (ASX:RWC) At AU$5.77?

Reliance Worldwide Corporation Limited (ASX:RWC), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the ASX over the last few months. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on Reliance Worldwide’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Reliance Worldwide

Is Reliance Worldwide Still Cheap?

Great news for investors – Reliance Worldwide is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is A$8.29, but it is currently trading at AU$5.77 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 Reliance Worldwide’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.

What does the future of Reliance Worldwide 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. Reliance Worldwide's earnings over the next few years are expected to increase by 57%, 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 RWC is currently undervalued, it may be a great time to increase 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 capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on RWC for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy RWC. 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.

Diving deeper into the forecasts for Reliance Worldwide mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in Reliance Worldwide, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.