Meliá Hotels International SA (BME:MEL), a hospitality company based in Spain, saw significant share price volatility over the past couple of months on the BME, rising to the highs of €12.66 and falling to the lows of €11.24. 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 Meliá Hotels International’s current trading price of €12.24 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Meliá Hotels 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 Meliá Hotels International
What’s the opportunity in Meliá Hotels International?
What kind of growth will Meliá Hotels International generate?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. With profit expected to grow by 28.84% over the next couple of years, the future seems bright for Meliá Hotels International. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in MEL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at MEL? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on MEL, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for MEL, 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 Meliá Hotels International. You can find everything you need to know about Meliá Hotels International in the latest infographic research report. If you are no longer interested in Meliá Hotels International, you can use our free platform to see my list of over 50 other stocks with a high growth potential.