When Should You Buy Alkyl Amines Chemicals Limited (NSE:ALKYLAMINE)?

While Alkyl Amines Chemicals Limited (NSE:ALKYLAMINE) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the NSEI over the last few months, increasing to ₹3,032 at one point, and dropping to the lows of ₹2,605. 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 Alkyl Amines Chemicals' current trading price of ₹2,605 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 Alkyl Amines Chemicals’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 Alkyl Amines Chemicals

Is Alkyl Amines Chemicals Still Cheap?

Alkyl Amines Chemicals is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 58.79x is currently well-above the industry average of 19.48x, meaning that it is trading at a more expensive price relative to its peers. In addition to this, it seems like Alkyl Amines Chemicals’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 does the future of Alkyl Amines Chemicals 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. 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. With profit expected to grow by 30% over the next year, the near-term future seems bright for Alkyl Amines Chemicals. 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? ALKYLAMINE’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe ALKYLAMINE 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 an eye on ALKYLAMINE for a while, 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 positive outlook is encouraging for ALKYLAMINE, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Alkyl Amines Chemicals as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 3 warning signs for Alkyl Amines Chemicals you should be mindful of and 1 of these is a bit unpleasant.

If you are no longer interested in Alkyl Amines Chemicals, 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.