When Should You Buy Fuller, Smith & Turner P.L.C. (LON:FSTA)?

By
Simply Wall St
Published
May 09, 2021
LSE:FSTA
Source: Shutterstock

Fuller, Smith & Turner P.L.C. (LON:FSTA), is not the largest company out there, but it saw a decent share price growth in the teens level on the LSE over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Fuller Smith & Turner’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Fuller Smith & Turner

What is Fuller Smith & Turner worth?

Great news for investors – Fuller Smith & Turner is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £13.47, but it is currently trading at UK£9.00 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that Fuller Smith & Turner’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Fuller Smith & Turner?

earnings-and-revenue-growth
LSE:FSTA Earnings and Revenue Growth May 10th 2021

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 41% over the next year, the near-term future seems bright for Fuller Smith & Turner. 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? Since FSTA is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 FSTA for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FSTA. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you'd like to know more about Fuller Smith & Turner as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for Fuller Smith & Turner you should be mindful of and 1 of them shouldn't be ignored.

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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. 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.
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