Why Mitsubishi Gas Chemical Company, Inc. (TSE:4182) Could Be Worth Watching

While Mitsubishi Gas Chemical Company, Inc. (TSE:4182) might not have the largest market cap around , it led the TSE gainers with a relatively large price hike in the past couple of weeks. The recent jump in the share price has meant that the company is trading at close to its 52-week high. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Mitsubishi Gas Chemical Company’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Mitsubishi Gas Chemical Company

What's The Opportunity In Mitsubishi Gas Chemical Company?

According to our valuation model, Mitsubishi Gas Chemical Company seems to be fairly priced at around 16% below our intrinsic value, which means if you buy Mitsubishi Gas Chemical Company today, you’d be paying a fair price for it. And if you believe the company’s true value is ¥3318.63, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Mitsubishi Gas Chemical Company’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Mitsubishi Gas Chemical Company 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. Mitsubishi Gas Chemical Company's earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 4182’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on 4182, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. In terms of investment risks, we've identified 2 warning signs with Mitsubishi Gas Chemical Company, and understanding these should be part of your investment process.

If you are no longer interested in Mitsubishi Gas Chemical Company, 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.