Should You Investigate AdvanSix Inc. (NYSE:ASIX) At US$45.29?

By
Simply Wall St
Published
November 30, 2021
NYSE:ASIX
Source: Shutterstock

AdvanSix Inc. (NYSE:ASIX), 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. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today I will analyse the most recent data on AdvanSix’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for AdvanSix

What's the opportunity in AdvanSix?

Good news, investors! AdvanSix is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $65.01, but it is currently trading at US$45.29 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, AdvanSix’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will AdvanSix generate?

earnings-and-revenue-growth
NYSE:ASIX Earnings and Revenue Growth December 1st 2021

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. Though in the case of AdvanSix, it is expected to deliver a negative earnings growth of -0.3%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although ASIX is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to ASIX, 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 ASIX 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.

Diving deeper into the forecasts for AdvanSix mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.

If you are no longer interested in AdvanSix, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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