VST Industries Limited (NSEI:VSTIND), a tobacco company based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹3503.45 and falling to the lows of ₹3028.5. 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 VST Industries's current trading price of ₹3249.55 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 VST Industries’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 VST Industries
What's the opportunity in VST Industries?The stock is currently trading at IN₨3,249.55 on the share market, which means it is overvalued by 73% compared to my intrinsic value of ₹1873.67. Not the best news for investors looking to buy! In addition to this, it seems like VST Industries’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will VST Industries generate?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 grow by 37.57% over the next couple of years, the future seems bright for VST Industries. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in VSTIND’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe VSTIND should trade below its current price, selling high and buying it back up again when its price falls towards its real value 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 VSTIND for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for VSTIND, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on VST Industries. You can find everything you need to know about VST Industries in the latest infographic research report. If you are no longer interested in VST Industries, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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Simply Wall St has no position in any of the companies mentioned. This article is general in nature. 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.
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