When Should You Buy ALPEK, S.A.B. de C.V. (BMV:ALPEKA)?

While ALPEK, S.A.B. de C.V. (BMV:ALPEKA) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price movement on the BMV over the last few months, increasing to Mex$30.65 at one point, and dropping to the lows of Mex$19.39. 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 ALPEK. de's current trading price of Mex$19.39 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at ALPEK. de’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 ALPEK. de

Is ALPEK. de Still Cheap?

Great news for investors – ALPEK. de is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is MX$30.45, but it is currently trading at Mex$19.39 on the share market, meaning that there is still an opportunity to buy now. Another thing to keep in mind is that ALPEK. de’s share price may be quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from ALPEK. de?

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 an eye on ALPEK A for a while, 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Case in point: We've spotted 4 warning signs for ALPEK. de you should be mindful of and 2 of these shouldn't be ignored.

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.