Is There Now An Opportunity In McBride plc (LON:MCB)?

McBride plc (LON:MCB), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the LSE over the last few months. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Today I will analyse the most recent data on McBride’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for McBride

What Is McBride Worth?

Great news for investors – McBride is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £0.64, but it is currently trading at UK£0.44 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that McBride’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 McBride?

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. In the upcoming year, McBride's earnings are expected to increase by 75%, 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? Since MCB is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 MCB for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MCB. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Be aware that McBride is showing 4 warning signs in our investment analysis and 1 of those can't be ignored...

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.

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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.