Petropavlovsk PLC (LSE:POG), a metals and mining company based in United Kingdom, received a lot of attention from a substantial price movement on the LSE in the over the last few months, increasing to £0.09 at one point, and dropping to the lows of £0.07. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Petropavlovsk’s current trading price of £0.07 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 Petropavlovsk’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Petropavlovsk
What is Petropavlovsk worth?Good news, investors! Petropavlovsk is still a bargain right now. In this instance, I’ve used the price-to-equity (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Petropavlovsk’s ratio of 6.81x is below its peer average of 12.47x, which suggests the stock is undervalued compared to the Metals and Mining industry. Petropavlovsk’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Petropavlovsk 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. Though in the case of Petropavlovsk, it is expected to deliver a relatively unexciting earnings growth of 6.74%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Petropavlovsk, at least in the near term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since POG is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. 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 POG 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 POG. 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Petropavlovsk. You can find everything you need to know about Petropavlovsk in the latest infographic research report. If you are no longer interested in Petropavlovsk, you can use our free platform to see my list of over 50 other stocks with a high growth potential.