At ₹499, Is It Time To Put Avanti Feeds Limited (NSE:AVANTIFEED) On Your Watch List?

While Avanti Feeds Limited (NSE:AVANTIFEED) might not be the most widely known stock at the moment, it saw a decent share price growth in the teens level on the NSEI 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? Let’s examine Avanti Feeds’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Avanti Feeds

Is Avanti Feeds Still Cheap?

Avanti Feeds appears to be expensive according to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Avanti Feeds’s ratio of 31.58x is above its peer average of 20.67x, which suggests the stock is trading at a higher price compared to the Food industry. But, is there another opportunity to buy low in the future? Given that Avanti Feeds’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Avanti Feeds?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. With profit expected to more than double over the next couple of years, the future seems bright for Avanti Feeds. 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? AVANTIFEED’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. At this current price, shareholders may be asking a different question – should I sell? If you believe AVANTIFEED should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on AVANTIFEED for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the optimistic prospect is encouraging for AVANTIFEED, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Avanti Feeds, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Avanti Feeds and we think they deserve your attention.

If you are no longer interested in Avanti Feeds, 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.