Is It Time To Consider Buying Mayur Uniquoters Limited (NSE:MAYURUNIQ)?

Mayur Uniquoters Limited (NSE:MAYURUNIQ), might not be a large cap stock, but it led the NSEI gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on Mayur Uniquoters’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Mayur Uniquoters

Is Mayur Uniquoters Still Cheap?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 Mayur Uniquoters’s ratio of 22.12x is trading slightly above its industry peers’ ratio of 20.55x, which means if you buy Mayur Uniquoters today, you’d be paying a relatively sensible price for it. And if you believe Mayur Uniquoters should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Although, there may be an opportunity to buy in the future. This is because Mayur Uniquoters’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What does the future of Mayur Uniquoters look like?

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 35% over the next year, the near-term future seems bright for Mayur Uniquoters. 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? It seems like the market has already priced in MAYURUNIQ’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at MAYURUNIQ? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on MAYURUNIQ, now may not be the most advantageous time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for MAYURUNIQ, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Mayur Uniquoters as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Mayur Uniquoters you should be aware of.

If you are no longer interested in Mayur Uniquoters, 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.