Is ALPEK, S.A.B. de C.V. (BMV:ALPEKA) Potentially Undervalued?

ALPEK, S.A.B. de C.V. (BMV:ALPEKA), is not the largest company out there, but it saw a decent share price growth in the teens level on the BMV over the last few months. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine ALPEK. de’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for ALPEK. de

What's the opportunity in ALPEK. de?

Good news, investors! ALPEK. de is still a bargain right now. According to my valuation, the intrinsic value for the stock is MX$28.33, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that ALPEK. de’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.

What kind of growth will ALPEK. de 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for ALPEK. de, at least in the near future.

What this means for you:

Are you a shareholder? Although ALPEK A is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. I recommend you think about whether you want to increase your portfolio exposure to ALPEK A, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on ALPEK A for some time, but hesitant on making the leap, I recommend you research further into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about ALPEK. de as a business, it's important to be aware of any risks it's facing. To help with this, we've discovered 3 warning signs (1 makes us a bit uncomfortable!) that you ought to be aware of before buying any shares in ALPEK. de.

If you are no longer interested in ALPEK. de, 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.