Should You Think About Buying Belden Inc. (NYSE:BDC) Now?

Belden Inc. (NYSE:BDC), is not the largest company out there, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. 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, could the stock still be trading at a relatively cheap price? Let’s examine Belden’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Belden

Is Belden Still Cheap?

Belden appears to be overvalued by 27% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$89.12 on the market compared to my intrinsic value of $70.25. Not the best news for investors looking to buy! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Belden’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What Kind Of Returns Can We Expect From Belden In The Future?

What kind of returns can we expect from Belden in the future? It’s one thing to get a stock at a low price, but the quality of the company is even more important, as its stock may be cheap or expensive for a reason. A way to assess stock quality is by looking how much it returns to you as the investor compared to how much you’re invested. Belden is expected to return 18% of your investment in the next couple of years if you buy the stock today. This is a relatively good return on your investment which builds up the case for owning the stock.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in BDC’s high returns, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BDC 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 an eye on BDC for a while, 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 is encouraging for BDC, which means it’s worth further examination of other factors 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 Belden at this point in time. You'd be interested to know, that we found 3 warning signs for Belden and you'll want to know about them.

If you are no longer interested in Belden, 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.