Stock Analysis

At US$15.86, Is It Time To Put PQ Group Holdings Inc. (NYSE:PQG) On Your Watch List?

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PQ Group Holdings Inc. (NYSE:PQG), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a mid-cap 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 examine PQ Group Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for PQ Group Holdings

What's the opportunity in PQ Group Holdings?

Good news, investors! PQ Group Holdings is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $20.48, but it is currently trading at US$15.86 on the share market, meaning that there is still an opportunity to buy now. PQ Group Holdings’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

Can we expect growth from PQ Group Holdings?

earnings-and-revenue-growth
NYSE:PQG Earnings and Revenue Growth February 10th 2021

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. With profit expected to more than double over the next couple of years, the future seems bright for PQ Group 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? Since PQG is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on PQG for a while, now might be the time to enter the stock. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy PQG. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

So while earnings quality is important, it's equally important to consider the risks facing PQ Group Holdings at this point in time. When we did our research, we found 4 warning signs for PQ Group Holdings (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

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What are the risks and opportunities for Ecovyst?

Ecovyst Inc. provides specialty catalysts and services in the United States, the Netherlands, the United Kingdom, and internationally.

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Rewards

  • Trading at 51.8% below our estimate of its fair value

  • Earnings are forecast to grow 24.32% per year

  • Earnings grew by 40.3% over the past year

Risks

  • Debt is not well covered by operating cash flow

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