Should You Think About Buying Ashland Inc. (NYSE:ASH) Now?

While Ashland Inc. (NYSE:ASH) might not have the largest market cap around , it led the NYSE gainers with a relatively large price hike in the past couple of weeks. The company is inching closer to its yearly highs following the recent share price climb. 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? Today we will analyse the most recent data on Ashland’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Ashland

Is Ashland Still Cheap?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 9.98% above our intrinsic value, which means if you buy Ashland today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $88.01, there’s only an insignificant downside when the price falls to its real value. Furthermore, Ashland’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Ashland?

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. Ashland's earnings over the next few years are expected to increase by 33%, indicating a highly optimistic future ahead. This should lead to more 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 ASH’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 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 an eye on ASH, 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.

So while earnings quality is important, it's equally important to consider the risks facing Ashland at this point in time. At Simply Wall St, we found 2 warning signs for Ashland and we think they deserve your attention.

If you are no longer interested in Ashland, 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.