When Should You Buy Morgan Sindall Group plc (LON:MGNS)?

While Morgan Sindall Group plc (LON:MGNS) might not have the largest market cap around , it saw a significant share price rise of 33% in the past couple of months on the LSE. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-cap 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? Today we will analyse the most recent data on Morgan Sindall Group’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Morgan Sindall Group

What's The Opportunity In Morgan Sindall Group?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 10% below our intrinsic value, which means if you buy Morgan Sindall Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth £43.44, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Morgan Sindall Group’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 kind of growth will Morgan Sindall Group 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. 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. However, with a relatively muted profit growth of 6.5% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Morgan Sindall Group, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MGNS’s future 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 the stock? 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 tabs on MGNS, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

So while earnings quality is important, it's equally important to consider the risks facing Morgan Sindall Group at this point in time. For example - Morgan Sindall Group has 2 warning signs we think you should be aware of.

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.