Is Now The Time To Look At Buying Franklin Electric Co., Inc. (NASDAQ:FELE)?

Franklin Electric Co., Inc. (NASDAQ:FELE), is not the largest company out there, but it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. 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. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Franklin Electric’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Franklin Electric

What Is Franklin Electric Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 17.06% above my intrinsic value, which means if you buy Franklin Electric today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is $90.92, there’s only an insignificant downside when the price falls to its real value. What's more, Franklin Electric’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Franklin Electric generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. However, with a relatively muted profit growth of 7.4% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Franklin Electric, at least in the short term.

What This Means For You

Are you a shareholder? It seems like the market has already priced in FELE’s future outlook, with shares trading around its fair value. 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 the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on FELE, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Case in point: We've spotted 1 warning sign for Franklin Electric you should be aware of.

If you are no longer interested in Franklin Electric, 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.