At UK£3.46, Is It Time To Put Breedon Group plc (LON:BREE) On Your Watch List?

Breedon Group plc (LON:BREE), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£3.73 at one point, and dropping to the lows of UK£3.15. 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 Breedon Group's current trading price of UK£3.46 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 Breedon Group’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 Breedon Group

Is Breedon Group Still Cheap?

Great news for investors – Breedon Group is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is £5.50, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Breedon Group’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.

Can we expect growth from Breedon Group?

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 relatively muted profit growth of 7.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Breedon Group, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since BREE is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on BREE for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy BREE. 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 investment decision.

If you'd like to know more about Breedon Group as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 1 warning sign for Breedon Group you should know about.

If you are no longer interested in Breedon 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.