Is Now The Time To Look At Buying Quaker Chemical Corporation (NYSE:KWR)?

Quaker Chemical Corporation (NYSE:KWR), is not the largest company out there, but it maintained its current share price over the past couple of month on the NYSE, with a relatively tight range of US$224 to US$246. However, does this price actually reflect the true value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Quaker Chemical’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Quaker Chemical

What's the opportunity in Quaker Chemical?

According to my valuation model, the stock is currently overvalued by about 31%, trading at US$234 compared to my intrinsic value of $178.50. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since Quaker Chemical’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. 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.

Can we expect growth from Quaker Chemical?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 a relatively muted profit growth of 8.9% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Quaker Chemical, at least in the short term.

What this means for you:

Are you a shareholder? KWR’s future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe KWR should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on KWR for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Quaker Chemical, you'd also look into what risks it is currently facing. To that end, you should learn about the 2 warning signs we've spotted with Quaker Chemical (including 1 which shouldn't be ignored).

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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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