Is Now An Opportune Moment To Examine McBride plc (LON:MCB)?

While McBride plc (LON:MCB) might not have the largest market cap around , it saw significant share price movement during recent months on the LSE, rising to highs of UK£1.33 and falling to the lows of UK£0.99. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether McBride's current trading price of UK£0.99 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at McBride’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for McBride

What Is McBride Worth?

Good news, investors! McBride is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that McBride’s ratio of 5.17x is below its peer average of 17.43x, which indicates the stock is trading at a lower price compared to the Household Products industry. What’s more interesting is that, McBride’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will McBride generate?

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. However, with a negative profit growth of -1.8% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for McBride. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Although MCB is currently trading below the industry PE ratio, the negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about whether you want to increase your portfolio exposure to MCB, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on MCB for some time, but hesitant on making the leap, we recommend you research further into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Our analysis shows 3 warning signs for McBride (1 is a bit unpleasant!) and we strongly recommend you look at these before investing.

If you are no longer interested in McBride, 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.