Is There Now An Opportunity In Luxfer Holdings PLC (NYSE:LXFR)?

Luxfer Holdings PLC (NYSE:LXFR), might not be a large cap stock, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Luxfer Holdings’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Luxfer Holdings

Is Luxfer Holdings still cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.51% above my intrinsic value, which means if you buy Luxfer Holdings today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $19.80, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, Luxfer Holdings has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Luxfer Holdings 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. With profit expected to grow by 46% over the next year, the near-term future seems bright for Luxfer Holdings. 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? LXFR’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

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

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 5 warning signs for Luxfer Holdings you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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