Is Now The Time To Look At Buying Rotork plc (LON:ROR)?

Rotork plc (LON:ROR), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the LSE. The company is now trading at yearly-high levels following the recent surge in its share price. 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, what if the stock is still a bargain? Let’s take a look at Rotork’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Rotork

What's The Opportunity In Rotork?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 15.14% above our intrinsic value, which means if you buy Rotork today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is £3.01, there’s only an insignificant downside when the price falls to its real value. Furthermore, Rotork’s low beta implies that the stock is less volatile than the wider market.

What does the future of Rotork look like?

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. Rotork's earnings over the next few years are expected to increase by 26%, 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? ROR’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 ROR, 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 the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Rotork, you'd also look into what risks it is currently facing. Every company has risks, and we've spotted 1 warning sign for Rotork you should know about.

If you are no longer interested in Rotork, 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.

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